The type of dividends paid by most preferred stocks. If a corporation misses a cumulative dividend on preferred stock, then the missed dividend accumulates. The corporation can never again pay a common stock dividend until all missed accumulated preferred dividends have been paid.
the owner of preferred stock with cumulative dividends has the right to receive accrued (previously unpaid) dividends in full before dividends are paid to any other classes of stock.
A dividend which accumulates if not paid in the period when due and must be paid in full before other dividends are paid on the company's ordinary shares (see paragraph 3, Section IV above).
Dividends on preferred shares which carry over from one year to the next if a preference dividend is omitted. An omitted cumulative dividend must be made up in a later year before any dividend may be paid on the common shares in that later year.
A common feature of preferred stock requires that the issuing corporation pay all previously unpaid preferred stock dividends before any common stock dividends may be paid.
Dividends that have not been paid. Normally these dividends are limited to preferred shares or a class of shares that have a guaranteed a dividend. In many cases, state law prevents the payment of these dividends if the company would not be solvent after the payments and therefore carry over from year to year.
Dividends that accrue at a fixed rate until paid are "Cumulative Dividends" which are payments to shareholders made with respect to an investor's Preferred Stock. Generally, holders of Preferred Shares are contractually entitled to receive dividends prior to holders of Common Stock. Dividends can accumulate at a fixed rate (for example 8%) or simply be payable as and when determined by a company's Board of Directors in such amount as determined by the board. Because venture backed companies typically need to conserve cash, the use of Cumulative Dividends is customary with the result that the Liquidation Preference increases by an amount equal to the Cumulative Dividends. Cumulative Dividends are often waived if the Preferred Stock converts to Common Stock prior to an IPO but may be included in the aggregate value of Preferred Stock applied to the Conversion Ratio for other purposes. Dividends that are not cumulative are generally called "when, as and if declared dividends."
Dividends on cumulative preferred stock that accumulate if not paid regularly or in full, and if earned must be paid in the future before dividends can be paid on common stock
Dividends on preferred shares, which carry over from one year to the next if a preference dividend is omitted. Provisions require that unpaid accumulated preferred stock dividends must be paid before any common stock dividends are.
