Asked by Kristen Phelps on Jun 04, 2024
Verified
Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the amount stated on the preferred stock.
Participating Preferred Stock
A type of preferred stock that provides holders the right to dividend payments exceeding the basic fixed rate if the company meets specified financial performance criteria.
Common Shareholders
Individuals or entities that own shares of a company's common stock, granting them rights to dividends and voting in the company.
Dividends Paid
The portion of a company's earnings that is distributed to shareholders as a return on their investment.
- Acquire knowledge about the various categories of stock, specifically common and preferred, along with their attributes.
Verified Answer
ZK
Zybrea KnightJun 07, 2024
Final Answer :
True
Explanation :
This is true. Participating preferred stock allows holders to receive additional dividends beyond the stated amount if there is excess dividend payout to common shareholders.
Learning Objectives
- Acquire knowledge about the various categories of stock, specifically common and preferred, along with their attributes.