Arrearage

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Arrearage

In the context of investments, refers to the amount by which interest on bonds or dividends on cumulative preferred stock is due and unpaid.

Arrearage

A previously due payment that has not been made. For example, because preferred stock has guaranteed dividends, a company is legally required to pay all dividends on preferred stock before it makes any dividend payments on common stock. If the company does not do so, usually because it has become cash poor, the preferred dividends are said to be in arrearage. This is also called being in arrears.

arrearage

An overdue payment. See also dividends in arrears.