A cumulative preference share carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to ordinary shareholders.

Question

Quizplus · Accepted Answer

This is correct. Cumulative preference shares have the feature of carrying the right to be paid all past unpaid dividends along with the current dividend before any dividends are paid to ordinary shareholders.

A Cumulative Preference Share Carries the Right to Be Paid