cumulative preferred stock
- noun
- Specialized
:
acciones preferentes acumulativas
- If the company skips dividend payments, these are owed to holders of cumulative preferred stock before common shareholders get any dividends.
Examples
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The firm's cumulative preferred stock holders received payment for several previous years when profits improved.
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Investors appreciate cumulative preferred stock because it ensures missed dividends are eventually paid.
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Investors often prefer cumulative preferred stock for its reliability.
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The company issued cumulative preferred stocks to attract investors.
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If the company skips dividend payments, these are owed to holders of cumulative preferred stock before common shareholders get any dividends.
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Investors appreciate cumulative preferred stock because it ensures missed dividends are eventually paid.
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The firm's cumulative preferred stock holders received payment for several previous years when profits improved.
Synonyms
A type of stock where missed dividends add up and must be paid before common shareholders
Surface Forms
Morphology
cumulative + preferred + stock
A learner who knows 'cumulative' (building up), 'preferred' (having priority), and 'stock' (a share) can infer the general idea: a type of stock with priority whose payments build up. However, the precise financial implication — that unpaid dividends legally accumulate and must be paid before common shareholders — is technical and not fully predictable from everyday meanings, so only a partial understanding is likely at B1 level.
Etymology
Cumulative preferred stock comes from a simple money image: cumulative means unpaid 'payments' pile up like a growing stack, preferred means these owners are first in line, and stock means a share in the company. So the picture explains the modern meaning: missed 'payments' are kept and 'must be paid before' common shareholders get any dividends.
