This is a very good question, and in fact, it is not contradictory, because "fixed dividend rate" does not equal "mandatory payment obligation."

The 10% fixed dividend of STRD means that if the Strategy board declares a dividend, the calculation standard is based on a par value of $100 at a 10% annualized rate, which theoretically is $10 each year, or about $2.5 each quarter.

However, non-cumulative means that if the board does not declare a dividend in a certain quarter, then the dividend for that quarter is lost and does not need to be made up in the future.

The official explanation from Strategy states that the dividends of STRD are not mandatory; they are only paid when declared by the board and when the company has legally available funds. If declared, they are paid quarterly.

Since STRD is non-cumulative, Strategy has no obligation to pay any quarterly dividends that were not announced in advance, nor will there be any accumulation of interest or dividends on unpaid dividends.

To put it in the simplest terms:

STRD has a par value of $100 and a fixed dividend of 10%.

Normally, a quarter should be:

$100 × 10% / 4 = $2.5

If the board declares a dividend, then $2.5 will be issued for that quarter.

If the board does not declare a dividend for that quarter, then it will be $0 for that quarter, and the $2.5 will not be made up in the future.

This is also why STRD carries a higher risk.

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