Final answer:
Non-cumulative stock does not offer dividends to shareholders if the company is unable to pay them. It can be less attractive for investors seeking a steady income stream.
Step-by-step explanation:
Non-cumulative stock refers to a type of stock that does not offer dividends to shareholders when the company is unable to pay them. This means that if the company experiences a loss or does not generate enough profit to distribute dividends, shareholders will not receive any payment.
On the other hand, cumulative stock allows the company to accumulate unpaid dividends and pay them at a later time. Non-cumulative stock can be less attractive for investors looking for a steady income stream from dividends, as they are not guaranteed to receive payouts if the company faces financial difficulties.