Investor Glossary-cumulative dividendInvestor Glossary-cumulative dividendInvestor Glossary-cumulative dividendInvestor Glossary-cumulative dividendInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Cumulative Dividend

The HTML to link to this page
 

A cumulative dividend is a dividend that, if the company doesn't pay it when it is due, must be paid in future periods. For example, suppose a company issues preferred shares with a purchase price of $100 and a cumulative dividend of 5% per year, or $5. If it is unable to pay the $5 cumulative dividend to shareholders in year 1 for any reason, it must pay a $10 ($5 + $5) cumulative dividend in year 2. A cumulative dividend applies only to preferred stock, since corporations have no obligation to pay dividends to common stock shareholders. Indeed, common shareholders cannot receive any dividends at all until all of the cumulative dividend obligations are paid. Note, however, that preferred stock is issued under a variety of terms and conditions which may not include a cumulative dividend.



Rate this cumulative dividend definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, wholly-owned subsidiary, risk management, phantom income, class C shares, deferred tax, minority interest, 1031 exchange, command economy, stock market close, VIX, 144a, average price per share, cancelled check, deferred revenue, 401a, 1035 exchange, EBITDA, required rate of return, debt service coverage, option premium, current ratio, margin rate, open position, limit order, reverse mortgage, FICO score, Zero Cost Collar, covered put, ex-dividend, FTSE, real GDP, liquidity ratio, LIBOR, labor relations, balance sheet, implied volatility, Key Rate Duration, irrevocable trust, diluted share, quality assurance, retained earnings, stock split, inflation, APR, ex-dividend date, dividends payable, annual return, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use