Final answer:
The statement is false as it confuses participating preferred stock with cumulative preferred stock where missed dividends are indeed accumulated. Corporate decisions regarding dividend payments are made by the board of directors, especially in public companies.
Step-by-step explanation:
Participating preferred stock typically entails that stockholders receive dividends before common stockholders and have the right to additional earnings under certain conditions. However, the statement that if a corporation fails to pay a dividend in any year, it must make it up in a later year before paying any dividends to common stockholders, is not necessarily true for all types of preferred stock.
This characteristic is specific to cumulative preferred stock, where missed dividend payments are accumulated and must be paid out before common stockholders can receive dividends.
Decision-making on stock issuance, dividend payments, and reinvestment of profits typically lies with the company's board of directors, particularly in public companies, where such decisions are heavily scrutinized by the shareholders and the market.
This statement is false. Participating preferred stock is a type of stock that provides the holder with certain rights and preferences, which may include receiving dividends before common stockholders. However, it does not require the corporation to make up any missed dividends for common stockholders.