Dividends in arrears must be paid when a corporation calls in its preferred stock.

Question

Quizplus · Accepted Answer

Dividends in arrears are unpaid dividends on cumulative preferred stock that have accumulated over time. When a corporation calls in its preferred stock, it must pay all accumulated dividends in arrears before paying any dividends to common stockholders. Therefore, dividends in arrears must be paid when a corporation calls in its preferred stock.

Dividends in Arrears Must Be Paid When a Corporation Calls