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

Question

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Cumulative dividends are a protective feature on a preferred stock that requires preferred dividends that were not paid in previous years to be disbursed before any common stock dividends can be paid. This ensures that preferred shareholders receive their dividend payments before any payments are made to common shareholders.

A Protective Feature on a Preferred Stock That Requires Preferred