easy · Financial Accounting stockholders-equity

What does it mean if preferred stock is 'cumulative'?

1. The stock can later be converted into a fixed number of shares of common stock of the issuer.
2. Unpaid dividends from prior years must be paid before common shareholders receive any dividends
3. The issuing company must repurchase the preferred stock from holders at a specific future date.
4. The stated preferred dividend rate automatically increases each year the company remains profitable.

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