Most preferred stocks have a feature that requires all past unpaid preferred dividend payments be paid before any common stock dividends can be paid.What is the name of this feature?

Question

Quizplus · Accepted Answer

The feature described is known as cumulative. This means that any missed preferred dividends must accumulate and be paid before any common stock dividends can be paid. Participating refers to preferred stocks that can receive additional dividend payments if certain conditions are met. Provisional is not a common term used in regards to preferred stock features. Convertible refers to preferred stocks that can be converted into a predetermined number of common shares.

Most Preferred Stocks Have a Feature That Requires All Past