Dividend Preferences Preferred Stock
As mentioned in the last chapter preferred stock may be participating.
- Non-participating--P/S receives no return beyond the rate stated regardless of the available dividends.
- Partially participating--P/S may receive a return beyond the stated amount. After C/S has received
the same return as P/S (based on the
C/S par) P/S may receive an additional
payment. There is a maximum amount
allowed to be paid to P/S beyond which any
additional dividends go entirely to C/S.