What type of preferred stock may have its dividend raised above the stated rate?

Participating preferred stock is the correct choice because it includes features that allow shareholders to receive dividends that exceed the stated rate under certain conditions. This type of preferred stock typically provides a fixed dividend rate but also participates in additional earnings of the company once common stockholders have received their dividends. If the company performs well financially, the holders of participating preferred stock may receive additional dividends based on the company's profits, effectively allowing their dividends to be raised above the initially set rate.

In contrast, straight preferred stock pays a fixed dividend and does not provide for any participation in additional earnings, meaning the dividend remains the same regardless of company performance. Cumulative preferred stock ensures that any unpaid dividends are accrued and paid at a later date, but it does not allow for an increase in the dividend beyond the stated rate. Convertible preferred stock provides the option to convert preferred shares into common shares, but it also does not feature a mechanism for increasing the dividend above the specified rate. Thus, participating preferred stock uniquely allows for dividends to surpass the specified level based on company performance.