Dividends in arrears pertain to

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Dividends in arrears refer to the accumulated and unpaid dividends of a company's cumulative preferred stock. Cumulative preferred stocks have a clause that requires the company to accumulate any unpaid dividends and pay them before they can pay dividends to common stockholders. Therefore, if a company fails to pay dividends in one period, the unpaid dividends accumulate and form dividends in arrears. Participating preferred stock entitles the shareholders to receive additional dividends on top of the regular dividend if the company exceeds a certain level of profit. Callable preferred stock can be repurchased by the company at a predetermined price. Convertible preferred stock can be converted into a specific number of common shares at the shareholder's option.

Dividends in Arrears Pertain to