A protective feature on a preferred stock that requires preferred dividends previously not paid to be disbursed before any common stock dividends can be paid is called _____.

Question

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Cumulative dividends are a protective feature that ensures the payment of unpaid preferred dividends before any common stock dividends can be paid. This means that if a company misses a dividend payment to preferred stockholders, it must make it up at a later date before it can pay any dividends to common stockholders. This feature provides an added level of safety for preferred stockholders.

A Protective Feature on a Preferred Stock That Requires Preferred