If the dividend is not declared during the period stated in the corporate charter, the dividend accrues and is payable in a later period. If a dividend right isn’t cumulative, the dividend would be lost forever if it’s not declared during the period stated in the corporate charter. Accrued but unpaid dividends are sometimes convertible into shares of Common Stock. Dividends that accrue. If a company cannot pay a cumulative dividend when it is due, it is still responsible for paying it in the future. The company must fulfil this obligation before it can pay out dividends to holders of any other classes of stock.
