Nonparticipating Preferred Stock

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Nonparticipating Preferred Stock

A preferred stock that entitles the holder to a flat dividend and nothing else. That is, the dividend will not be higher if the company performs particularly well, but instead remains the same at all times. However, nonparticipating stockholders are usually entitled to a minimum dividend, unlike common stock holders, who do not have a similar right. Most preferred stock is nonparticipating. See also: Participating Preferred Stock.