Cumulative and non-cumulative preferred stock
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jeannette
Apprentice
Joined: 18 Oct 2007
Posts: 2
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 Posted: 05/31/08 - 09:58 Post subject: |
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| Hi to you all. I am reading about different types of stocks and shares and I am hoping for your comments on the matter. I have heard that there are two types of preferred or preference stock, namely cumulative and non cumulative. What does that mean? Can you explain the difference? |
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ellsworth
Apprentice
Joined: 28 Apr 2007
Posts: 5
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| Posted: 06/30/08 - 01:15 Post subject: |
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| No problem, it is pretty obvious actually. In the case of cumulative preferred stock, the dividend accumulates for the next round if it is not paid, whereas this is not the case with non cumulative. That means that in the latter case, there will be no dividend payment, where it will happen in the first. |
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