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 non-cumulative preferred shares must receive:

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