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.