Which preference share feature grants shareholders the right to receive accumulated missed past dividends before common shareholders receive any payment?

Explanation

• Cumulative Preference Shares stipulate that if a company skips dividend payments in any given year, those skipped dividends accumulate as ‘dividends in arrears’.
• All cumulative dividends in arrears must be fully paid before any cash dividends can be paid to common stock shareholders.
• Non-cumulative preference shares forfeit unpaid dividends from past periods permanently.