Owners of stock do not lose their rights to a dividend in a year in which no dividends are declared.

Question

Quizplus · Accepted Answer

Cumulative preferred stock allows for unpaid dividends to accumulate and be paid in the future, ensuring that the owner of the stock does not lose their right to a dividend in a year in which no dividends are declared. Participating preferred stock, convertible stock, and common stock do not have this feature.

Owners of Stock Do Not Lose Their Rights to a Dividend