Bookkeeping - Moravianna

Bookkeeping

Non-cumulative Stock Explained

It's worth pointing out that some preferred stock may explicitly state that it is noncumulative. This means that if a company does not pay a dividend in a given year, that "missed" dividend is not directly made up for in a future period. Dividends are treated as year-to-year; any prior period does not carryover and does not hold weight into the order of who gets paid what. This type of stock is common in...

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