If a preferred stock issue is cumulative, this means that unpaid preferred stock dividends:
A) are paid at the end of the year.
B) are legally binding on the corporation.
C) must be paid in the future before common stock dividends can be paid.
D) are never repaid.

Question

Quizplus · Accepted Answer

Cumulative preferred stock means that if any dividends are missed, they must be paid out to preferred shareholders before any dividends can be paid to common shareholders.

If a Preferred Stock Issue Is Cumulative, This Means That