Cumulative preferred stock

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Cumulative preferred stock

Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock.

Cumulative Preferred Stock

Preferred stock for which the publicly-traded company must pay all dividends. If a company misses a dividend payment for any reason, it still owes it to cumulative preferred stockholders. That is, all dividends that were "skipped" must be paid to cumulative preferred stockholders before any dividends are paid to common stock holders. This contrasts with non-cumulative preferred stock, for which stockholders must forgo dividend payments that are missed. Most preferred stock is cumulative preferred stock.
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