Dividends in arrears on cumulative preferred stock are legal liabilities of the corporation until the dividends are paid.

Name: Dividends in arrears on cumulative preferred stock are legal liabilities of the corporation until the dividends are paid.
Brand: Quizplus
Rating: 4.7 (46 reviews)

Question

Quizplus · Accepted Answer

Dividends in arrears on cumulative preferred stock are not considered legal liabilities until the board of directors declares them. They are obligations that must be paid before common dividends, but not legal liabilities.

Dividends in Arrears on Cumulative Preferred Stock Are Legal Liabilities