$3 cumulative preferred shares means that each preferred shareholder is eligible to receive
A) a quarterly dividend of $3 per share.
B) an annual dividend of $3 per share.
C) a monthly dividend of $3 per share.
D) no dividend.

Question

Quizplus · Accepted Answer

Cumulative preferred shares with a "$3" designation typically mean that the shareholder is entitled to an annual dividend of $3 per share. If the company does not pay the dividend in a given year, it accumulates and must be paid out before any dividends can be paid to common shareholders.

$3 Cumulative Preferred Shares Means That Each Preferred Shareholder Is