Cumulative preferred stocks are preferred stocks for which all passed (unpaid) dividends in arrears must be paid along with the current dividend prior to the payment of dividends to common stockholders.

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Cumulative preferred stocks have a feature where any unpaid dividends must be paid before any dividends are paid to common stockholders. This means that all passed (unpaid) dividends in arrears must be paid along with the current dividend, thus making the statement true.

Cumulative Preferred Stocks Are Preferred Stocks for Which All Passed