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.
References in periodicals archive ?
In the case of cumulative preference shares, any unpaid dividend in one year must be paid next year or years before any other dividend for noncumulative preference shares is paid and before any ordinary shares dividend is paid.
This includes debt capital instruments, redeemable non-cumulative preference shares and redeemable cumulative preference shares under Tier-II capital.
And for their commendation for conversion of Perpetual Non Cumulative Preference Shares (PCNPS) held by Govt.
of 5% non-convertible, redeemable, cumulative preference shares at Rs 1,000 each aggregating to Rs 25.
050 per share on its 10% cumulative preference shares.

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