Lesson: Types of Preferred Stock

In this lesson, Nick Palazzolo, CPA, breaks down the intricacies of preferred stock and its various types. He clarifies the concept of dividends in arrears, explaining the accumulation of unpaid dividends and how this impacts cumulative preferred stock. Nick also delves into the specific characteristics and features of participating, convertible, callable, and redeemable preferred stock, drawing parallels between these and similar bond concepts. Finally, he discusses the reporting of dividends in arrears in financial statement notes and the preference of payment to shareholders, ensuring a solid understanding of these essential components of corporate finance.