1. Axon Inc. has 5%, $100 par, noncumulative preferred stock. During the year, Axon declared and paid a preferred dividend that exceeded $5 per share? The preferred stock must be
   1. redeemable.
   2. callable.
   3. nonvoting.
   4. convertible.
   5. participating(answer)

Can someone help me with this question please? I know the answer key says the answer "e)participating" but I want an explanation of why? and what exactly is "participating" thanks in advance!