Question

Prefrence dividend in arrears on the date of winding up is​

Answer 1

It is settled law that in the case of cumulative preference shares, the arrears of dividend are payable on winding up, subject, of course, to settlement of all claims of outsiders. Thus, if need be and possible, a call should be made on equity shareholders to pay arrears of dividend on cumulative preference shares.

Answer 2

Answer:

It is an amended law that in the case of popular collections, shares dividends are paid upon termination, subject to, in fact, the payment of all claims by third parties. Therefore, if necessary and possible, shareholders should be called upon to repay interest on the preferred shares.

Explanation:

A dividend in arrears is a budget payment associated with a cumulative preferred stock that has not been paid by the due date. These shares are not approved by the board of directors, because the issuing company does not have sufficient funds to make the payment.