Arrearage is a term that means overdue. In regular terms when you are using internet service and you are billed every month. If you forget to pay the bill for the period it will be billed in the next month’s bill as an arrear. In investment terms, the arrearage refers to the accumulation of dividends that are still unpaid by the company to the preference shareholders.
The term of arrears relevant to dividends is applicable only in the case of cumulative preference shares. Since the dividends are paid when the company management thinks fit and it is not mandatory to be paid every year. The holders of cumulative preference shares have a right to receive all unpaid dividend that was due but unpaid. The unpaid dividend is called arrears.
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What is meant by dividend arrearage on preferred stock? If dividends
Dechow Company has outstanding 20,000 shares of$50 par
