I would like to know if a company is unable to pay any dividend on cumulative preference shares till redemption or if arrears of dividend are payable on the date of redemption, will the arrears of dividend lapse once the company repays the face value on redemption?
In case of cumulative preference shares, the dividend is apportioned every year but is payable along with the principal amount at the time of redemption.
The amount is payable even if the shares are redeemed and the Company will have to pay it to the shareholder(s).
Thanks & Regards,
Avika
CAclubindia
