Preferred stock is usually cumulative. This means that a corporation must

require that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders.

enables a preferred stockholder to accumulate dividends until they equal the par value of the stock and receive the stock in place of the cash dividends.

limit the amount of cumulative dividends to the par value of the preferred stock.

show that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock.