Question

preferred stock that limits stockholders to receiving only the stated amount as a dividend is called:

Answer 1

Preferred stock that limits stockholders to receiving only the stated amount as a dividend is called: Nonparticipating preferred stock.

What is a preferred stock dividend?

The cash dividends that a business distributes to its preferred shareholders are referred to as preferred dividends. The fact that preferred stock often pays greater dividend rates than the same company's common stock is one advantage of holding it.

Non-participating preferred stock has restrictions on the amount of dividends that can be paid to its owners. This often indicates that the stock certificate's front contains a specified mandated dividend percentage.

Shareholders of non-participating shares do not receive a portion of the profits of the issuing company. These shares are referred to as preferred shares because they normally offer a predetermined rate of return in the form of a dividend.

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