Cumulative preferred stock has a right to be paid both current and prior periods' unpaid dividends before any dividend is paid to common shareholders.

Question

Quizplus · Accepted Answer

Cumulative preferred stock is a type of preferred stock that entitles its holders to receive both current and prior periods' unpaid dividends before any dividend is paid to common shareholders. The unpaid dividends accumulate and must be paid before any dividends can be distributed to common stockholders. Therefore, option A is correct.

Cumulative Preferred Stock Has a Right to Be Paid Both