A cumulative provision added to preferred stock protects preferred shareholders, who do not carry the right to vote.

Name: A cumulative provision added to preferred stock protects preferred shareholders, who do not carry the right to vote.
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Question

Quizplus · Accepted Answer

A cumulative provision ensures that if any dividends are missed, they must be paid out to preferred shareholders before common shareholders can receive dividends, offering a layer of financial protection to preferred shareholders.

A Cumulative Provision Added to Preferred Stock Protects Preferred Shareholders