Little Texas Inc. recently noted that its 4% preferred stock and 4% participating second preferred stock, which

Question:

Little Texas Inc. recently noted that its 4% preferred stock and 4% participating second preferred stock, which are both cumulative, have priority as to dividends up to 4% of their par value. Its participating preferred stock participates equally with the common stock in any dividends in excess of 4%. What is meant by the term participating? Cumulative?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...