Cumulative preferred stock requires that any past, omitted dividends must be paid to the preferred stockholders before the common stockholders will be paid any dividend.
So while common stockholders often receive nothing if a company enters bankruptcy protection, preferred shareholders may end up with a few cents on the dollar.
The preferred shares will also have a liquidation preference of $0.0001 per share and holders will be entitled to participate with common stockholders in distributions upon liquidation.
Adjusted net income allocated to common stockholders was $47.2 million, or $0.58 per share, compared with $63.0 million, or $0.76 per share, for the third quarter of 2015.
