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If preferred stock possesses a cumulative dividend preference and $50,000 of dividends are in arrears from prior years, the preferred shareholders will receive the total amount of dividends in arrears, then the current year's dividends, and then the common stockholders will receive the remaining amount of dividends declared and paid. The common stockholders will only receive this year's dividends, then the common stockholders will receive the remaining amount of the dividends declared and paid. The preferred shareholders must wait until the common stockholders receive their annual dividend, then they are entitled to be paid the dividends in arrears. None of these statements are true.
Submitted by Robert N. Feb. 07, 2023 02:22 p.m.
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