I had a situation that kinda stumped me, and wanted to get the input of others.
The situation and background is a company has noncumulative preferred shares, and has a common stock they routinely (always, for decades) pays dividends to the common shareholders.
They are calling and redeeming the preferred shares on June 30th, and pay dividends quarterly (March 31st, June 30th, September 30th, and December 31st) so the dividends would also be paid on the for Q2 if declared would be paid on June 30th, the redemption date. Could the company just theoretically not declare or pay dividends on the preferred for the second quarter (June 30th) and get out of it by waiting to declare the dividend on the common shares until they’ve called the preferred shares? So, theoretically, redeem preferred on June 30th, declare the common shares dividend for Q2 on July 1st, since you can’t declare common shares dividend until after you’ve already paid the preferred?
Though they are non cumulative, the aspect of the consistent dividend on the common makes it pretty much guaranteed under normal circumstances you’ll get preferred quarterly dividends. I just don’t understand how this last quarter’s payment will be impacted with the redemption date being the same date as the quarterly payment date, and if the company could side step the dividend by simply waiting to declare the common dividend until the day after redeeming the preferred.