Option D: Noncumulative stock
The term "non-cumulative" refers to the type of preferred stock that does not pay shareholders any unpaid or omitted dividends. Preferred stock is issued at a prescribed dividend rate. Dividend rates can be expressed as dollars or percentages of the face value.
Non-cumulative is a term used to describe the type of preferred stock that prevents the issuer from paying dividends to shareholders. This means that shareholders are not entitled to abbreviate or unpaid dividends.
Non-participating preferred stock is preferred stock that clearly limits the number of dividends paid to the holder. This usually means that the surface of the stock certificate has a specially defined dividend rate.
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