Practical Law Glossary Item 9-384-7082 (Approx. 2 pages)
Glossary
Cumulative Dividend
A type of dividend which, if not paid when due, accumulates until the next time the corporation pays dividends (with the oldest deferred payment made first). Cumulative dividends are only payable on preferred stock (although not all preferred stock includes this right). Dividends on common stock are payable only if and when declared by a corporation's board of directors. Any unpaid cumulative dividends must be paid before any common stock dividends are paid.