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Type of preferred stock whose payments are missed and must be paid before paying dividends of common stock is classified as
Answer & Solution
Correct Answer:
Option
D
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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