* Site-Outage Notice: Our engineering elves will be tweaking the Shmoop site from Monday, December 22 10:00 PM PST to Tuesday, December 23 5:00 AM PST. The site will be unavailable during this time.
Dismiss
© 2014 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Cumulative Preferred Stock

Definition:

The dividend on the preferred stock must be paid before the company can pay the common shareholders a cent! If it's not paid, then it just builds and builds. In theory, the company could stiff the preferred holders forever, but eventually the common shareholders will revolt and throw the bastards out of those cushy jobs. Self-preservation usually trumps continued jerk-dom.

Advertisement