Cumulative Preferred Stock

外汇网2021-06-19 13:35:47 66

A type of pferred stock with a provision that stipulates that if any pidends have been omitted in the past, they must be paid out to pferred shareholders first, before common shareholders can receive pidends.

Taobiz explains Cumulative Preferred Stock

A pferred stock will typically have a fixed pidend yield based on the par value of the stock. This pidend is paid out at set intervals, usually quarterly, to pferred holders. If a company runs into some financial problems and is unable to meet all of its obligations, it will likely suspend its pidend payments and focus on paying the business-specific expenses. If the company gets through the trouble and starts paying out pidends again, it will first have to pay back all of the pidends that are owed to pferred share holders.

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