Cumulative Dividend Feature

Cumulative dividend feature

A requirement that any missed preferred or preference stock dividends be paid in full before any dividend payment on common shares is made.

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Cumulative Dividend Feature

A characteristic of preferred stock in which all dividends on preferred stock must be paid before any dividends are paid on common stock. That is, if a publicly-traded company stops paying dividends on preferred stock, it must stop paying dividends on all stock. If the company wishes to begin paying dividends on common stock again, it must pay what are called dividend arrears; that is, it must pay all back preferred stock dividends before any common stock dividends.