Before a company can pay dividends to the common shareholders,the owners of cumulative preferred shares must receive:

Name: Before a company can pay dividends to the common shareholders,the owners of cumulative preferred shares must receive:
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Question

Quizplus · Accepted Answer

Cumulative preferred shareholders are entitled to receive all dividends in arrears before any dividends can be paid to common shareholders. Therefore, the answer is B, which states that they must receive all dividends in arrears plus the current year's dividend.

Before a Company Can Pay Dividends to the Common Shareholders,the