Cumulative Preferred Stock (Noun)
Meaning
Preferred stock whose dividends if omitted accumulate until paid out.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company issued a cumulative preferred stock that offered investors an increased dividend yield over time if payments were missed.
- Cumulative preferred stock allows holders to receive any omitted dividends before common shareholders are paid.
- The financial statement reflected the holders of cumulative preferred stock would be paid their accumulated dividends before the next general shareholder meeting.
- Issuing cumulative preferred stock provides a measure of protection to preferred shareholders in the event that a dividend payment is missed.
- Cumulative preferred stock can have a significant advantage for investors who believe the company may temporarily experience difficulties in meeting its dividend obligations.