A ____ prevents dividends from being paid on common stock until all current and previously omitted dividends are paid on preferred stock.

Question

Quizplus · Accepted Answer

A cumulative provision in preferred stock ensures that dividends are not paid on common stock until all current and previously omitted dividends on the preferred stock are fully paid. This protects the interests of preferred shareholders by prioritizing their dividends over common stock dividends.

A ____ Prevents Dividends from Being Paid on Common Stock