cumulative dividend
- A dividend that, if unpaid when due for preferred stockholders, accumulates and is paid in future dividend payments
- Preferred stockholders have the privilege of receiving a cumulative dividend before any other dividends are distributed.
- If a company fails to pay a cumulative dividend on time, it will be accrued and paid out in subsequent payments.
- When a cumulative dividend is unpaid, it is not forgotten but added to future payouts to ensure preferred stockholders receive their due.
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