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Doctors Medicines MCQs Q&A

  1. non participating preferred stock
  2. participating preferred stock
  3. non cumulative preferred stock
  4. cumulative preferred stock
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1 Answers

Answer: Option 4

Type of preferred stock whose payments are missed and must be paid before paying dividends of common stock is classified as cumulative preferred stock. Cumulative preferred stock is a type of preferred stock with a provision that stipulates that if any dividend payments have been missed in the past, the dividends owed must be paid out to cumulative preferred shareholders first.

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