Cumulative Preferred Stock Definition Examples How It Works
What is Cumulative Preferred Stock? Cumulative Preferred stockholders get a fixed dividend rate irrespective of the profit marginProfit MarginProfit Margin is a metric that the management, financial analysts, & investors use to measure the profitability of a business relative to its sales. It is determined as the ratio of Generated Profit Amount to the Generated Revenue Amount. read more; this means they are not participating in the company’s profits. The benefit of these stocks is that in case of a financial crisis, if the company cannot declare the dividend, then the dividend amount will accumulate and will get paid in the future whenever the company declares the dividendDeclares The DividendDividend declared is that portion of profits earned that the company’s board of directors decides to pay off as dividends to the shareholders of such company in return to the investment done by the shareholders through the purchase of the company’s securities....