Dividends in arrears on cumulative preferred shares
A) never have to be paid, even if common dividends are paid.
B) should be recorded as a current liability until they are paid.
C) must be paid before common shareholders can receive a dividend.
D) enable the preferred shareholders to share equally in corporate profit with the common shareholders.

Question

Quizplus · Accepted Answer

Dividends in arrears on cumulative preferred shares must be paid before any dividends can be paid to common shareholders.

Dividends in Arrears on Cumulative Preferred Shares