If a preferred stockholder receives a larger dividend than stated, what type of stock is likely held?

When a preferred stockholder receives a larger dividend than what is stated on the preferred stock certificate, it is indicative of a participating preferred stock. This type of stock typically allows holders to receive additional dividends beyond the fixed rate in certain circumstances, such as when the company performs exceptionally well and generates higher profits. Participating preferred stock usually provides stockholders with the right to participate in dividend distributions alongside common stockholders after the fixed dividends have been paid.

In contrast, cumulative preferred stock guarantees that if a company skips dividend payments, the missed payments accumulate and must be paid in full before any common stock dividends can be issued. While cumulative preferred stock ensures that dividends are not permanently forfeited, it does not imply that the dividend paid would exceed the stated amount unless it also has participating features.

Consequently, if a preferred stockholder is receiving dividends above the stated amount, participating preferred is the most accurate description of the stock type held, as it encompasses that additional payout aspect linked to the company's overall financial performance.