If nonconvertible preferred shares are noncumulative, subtraction of the current year's dividend must be made whether preferred dividends are declared or not for the current year.

Question

Quizplus · Accepted Answer

Noncumulative preferred shares do not require the subtraction of the current year's dividend unless the dividends are actually declared. If dividends are not declared in a given year, they are not owed to holders of noncumulative preferred shares in the future.

If Nonconvertible Preferred Shares Are Noncumulative, Subtraction of the Current