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    Why is the cumulative feature of preferred stock particularly important to preferred stockholders?

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    There are different types of preferred stock. The preferred stock may come with a cumulative dividend. It is important to preferred stockholders because it means that if the dividend is cumulative it means - no dividends can be paid to the common stockholders until all dividends held in arrears (past dividends that are due but not yet paid) are paid to the preferred stockholders. The dividends accumulate if not paid on schedule. Lot ...

    Solution Summary

    The types of preferred stock are indicated.