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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Cumulative Preferred Stock


The dividend on the preferred stock must be paid before the company can pay the common shareholders a cent! If it's not paid, then it just builds and builds. In theory, the company could stiff the preferred holders forever, but eventually the common shareholders will revolt and throw the bastards out of those cushy jobs. Self-preservation usually trumps continued jerk-dom.