Preferred stock is considered to be nonparticipating because: a. Investors do not participate in the election of

Question:

Preferred stock is considered to be nonparticipating because:
a. Investors do not participate in the election of the firm’s directors.
b. Investors do not participate in the determination of the payout policy.
c. Investors do not participate in the firm’s earnings growth.
d. None of the above.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...