Noncumulative Preferred Shares

Noncumulative Preferred Shares, also known as non cumulative preferred stock, are a type of equity security that does not entitle the holder to claim any omitted or unpaid dividends in the future. If the issuing company decides not to pay dividends in a given period, the shareholder forfeits the right to those dividends. This feature distinguishes them from cumulative preferred shares, which do accumulate unpaid dividends.