Problem:
Bill Affleck is thinking about buying preferred stock of Ceylon Holdings. He wants to be protected if the company needs to omit a dividend payment. He wants any unpaid dividends to accumulate and be paid before any common stock dividends are paid.
Required:
Question: What feature of preferred stock would proct Bill?
A. Convertible
B. Callable
C. Cumulative
D. Credible
E. None of the choices
Note: Please provide equation and explain comprehensively and give step by step solution.