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Dictionary by pitch.dog
Term-sheet economics · Working

Cumulative dividend

Also called: accruing dividend

ELI5

Unpaid dividends keep adding up.

Used in conversation

“The cumulative dividend increases the preference over time.”

Definition

A dividend that accrues if not paid and remains payable under the security's terms.

Here “Cumulative dividend” means: A dividend that accrues if not paid and remains payable under the security's terms.

Pitch context

You will see “Cumulative dividend” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches term-sheet economics.

Why it matters: In term-sheet economics, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

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Sources & evidence · 5

Direct term-level sources and supporting source families.