A preferred stock in which the holder is entitled to the stated dividend, and also to additional dividends on a specified basis upon payment of dividends to the common stockholders. The preferred stock entitles the owner to receive a predetermined sum of cash (usually the original investment plus accrued dividends) if the company is sold or has an IPO. The common stock represents additional continued ownership in the company.
A preferred stock entitled to a specific dividend before dividends are paid to common stockholders, and which also participated with the common stock in additional corporate earnings distributed as dividends.
preferred stock which, in addition to a regular dividend, also pays an additional dividend (the participating dividend) when common stock dividends exceed a specified amount.