Mission Critical Software, Inc.. is listed on the Nasdaq and is a leading provider of systems management software for Windows NT network and Internet infrastructure. Like many start-up companies.

Mission Critical struggled with cash flows as it developed new business opportunities. A student found a financial statement for Mission Critical that included the following:

The student who read the note suggested that the Mission Critical preferred stock would be a good investment because of the large amount of dividend income that would be earned when the company started paying dividends again: "As the owner of the stock, I'll get dividends for the period I hold the stock plus some previous periods when I didn't even own the stock." Do you agree? Explain.

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1998 increase in dividends in arrears on preferred stock was $264,000.