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

question 56

Multiple Choice

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

• A) the current year's dividend, but not dividends in arrears
• B) all dividends in arrears plus the current year's dividend
• C) dividends in arrears, but not the current year's dividends
• D) neither the current year's dividends nor dividends in arrears