Understanding Preferred Shares

Preferred shares are a unique financial instrument that has characteristics of both equity and debt. Investors in preferred shares usually receive fixed dividends and have a higher claim on assets than common shareholders in the event of liquidation. However, they typically do not carry voting rights. Consider the following statements about preferred shares:

1. Preferred shares always have a cumulative feature, wherein unpaid dividends accumulate and must be paid before any dividends are paid to common shareholders.

2. Preferred shares can be convertible, allowing investors to convert their preferred shares into a specified number of common shares at certain points in time.

3. Preferred shareholders have the right to vote on company matters, similar to common shareholders.

Which of the following statements about preferred shares is correct?