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2 June, 20:18

Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called:

A. Noncumulative preferred stock.

B. Participating preferred stock.

C. Callable preferred stock.

D. Cumulative preferred stock.

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  1. 2 June, 21:22
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    D. Cumulative preference stock.

    Explanation:

    A. Non cumulative Pref stock: if preference dividend is not paid in the current year, it is forfeited.

    B. Participating Pref Stocks: Holders can participate in profit sharing after receipt of fixed interest.

    C. Callable Pref Stock: This are stocks that the company can redeem in between. Hence the company can redeem it at a premium.

    D. Cumulative Pref Stock: The dividend are accumulated and paid anytime before payment to common stock holders.
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