Which of the following is the correct description of dividends in arrears, as it applies to cumulative preference shares?
A)The cumulative amount of dividends that were paid in previous years
B)The amount of dividends that will be paid in the coming year
C)The cumulative amount of dividends which were not paid in previous years
D)The amount of dividends that were paid late

Question

Quizplus · Accepted Answer

Dividends in arrears refer to the cumulative amount of dividends on cumulative preference shares that have not been paid in previous years. These unpaid dividends must be paid out before any dividends can be paid to common shareholders.

Which of the Following Is the Correct Description of Dividends