Before a Company Can Pay Dividends to the Common Shareholders

Multiple Choice

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

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