cumulative preferred

8.3

A type of stock where missed dividends add up and must be paid before common shareholders

noun

Specialized

: preferente acumulativa

Dividends missed on cumulative preferred stock must be paid before any are issued to common shareholders.

Examples

The company failed to pay dividends on its cumulative preferred shares for two years in a row.
Investors often choose cumulative preferred stock for its guaranteed dividend payments.
Investors prefer cumulative preferred stock for its security.
Many companies issue cumulative preferreds to attract investors.
Dividends missed on cumulative preferred stock must be paid before any are issued to common shareholders.
The company failed to pay dividends on its cumulative preferred shares for two years in a row.
Investors often choose cumulative preferred stock for its guaranteed dividend payments.

Synonyms

cumulative preferred stock

vscumulative preferred

Specialized

8.4

A share that keeps unpaid dividends and pays them before common shares

is the same meaning but in a shorter form omitting the noun

Surface Forms

cumulative preferred singular

cumulative preferreds plural

Morphology

cumulative + preferred

The adjective 'cumulative' clearly signals an accumulating effect and 'preferred' signals priority, so a learner can partly infer that something preferred accrues over time. However, the phrase refers to a specific financial category ('preferred stock' and rules about unpaid dividends) and omits the noun 'stock', so the full legal/financial implications are not predictable from the words alone for a B1 learner.

Etymology

Cumulative preferred comes from a simple picture: missed 'dividends' pile up. The word cumulative means they add up and preferred means these shares come first, so the unpaid amounts must be paid before common shareholders get anything.