Definition of Non-cumulative Preferred

Non-cumulative Preferred is a type of preferred stock whose dividends do not accumulate in arrears if the issuer misses the payment.

Applying "Non-cumulative Preferred" to Securities Exams:

Non-cumulative Preferred stock carries a stated dividend rate, however if the company that issued the non – cumulative preferred stock is unable to pay the stated dividend sue to financial difficulty the owner of the non cumulative preferred stock is not owed the dividend that was missed.

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