"Cumulative dividends" are dividends on preferred stock of a corporation that accrue if not paid when due (for example, every three months). Preferred cumulative dividends must be paid before dividends are paid to common shareholders. For example, the preferred stock might be entitled to a cumulative dividend of $1 per year per share. If the dividends are not paid for three years, the corporation would have to pay out $3 per share (together with possible compounding dividends, depending on the language of the preferred's rights) before the common shareholders could receive any dividends.