Definition

Dividends in arrears

When preferred stock, is cumulative, preferred dividends not declared in a given period are called dividend in arrears.

To illustrate, assume that scientific leasing has 5000 shares of 7% is $35,000 (5,000 but dividends are two years in arrears. In this case, preferred stockholders are entitled to receive the following dividends in the current year.

 

                                     Dividends in areas (35,000              $70,000

                                  Current-year dividends                               35,000                        

                                       Total preferred dividends                            $105,000

Share it:  Cite

More from this Section

  • Selling expenses
    Selling expenses are those expenses which are associated with making sales. They include ...
  • Paid-in capital
    Paid-in capital is the total amount of cash and other assets paid in to the corporation ...
  • Annual rate of return technique
    Annual rate of return technique determines the profitability of a capital expenditure ...
  • Bond certificate
    Bond certificate is a legal document that indicates the name of the issuer, the face value ...
  • Average collection period
    Average collection period means the average amount of time that a receivable is outstanding; ...