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


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