One of the mysteries of the English language finally explained.
A preference share whose annual fixed-rate dividend, if it cannot be paid in any year, accrues until it can.
- ‘Also in 2006, the cumulative preference shares purchase programme will be continued, and 525,000 shares are expected to be repurchased.’
- ‘According to the notice, the redeemable cumulative preference shares are redeemable not later than 20 years from the date of allotment.’
- ‘The nominal value of each cumulative preference share changed to 0.12 Euros.’
- ‘If the dividend on a cumulative preference share is not paid, the payment is deferred and any arrears have to be paid prior to further ordinary dividend payouts.’
- ‘Shares could also be issued, for example cumulative preference shares with a dividend calculated to reflect the amount of interest and principal received.’
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