Assume the Following Capital Structure: Preferred Stock, 6%, $50 Par

question 49

Multiple Choice

Assume the following capital structure: Preferred stock, 6%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for three prior years (2011-2013) .
Common stock, $100 par value, 2,000 shares issued and outstanding.
Total dividends declared and paid in 2014 were $50,000. How much of the 2014 dividend will be paid to the preferred stockholders assuming the preferred stock is cumulative?

• A) $12,000.
• B) $3,000.
• C)$47,000.
• D)$38,000.

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Definitions:

Crepuscular

Pertaining to animals that are active primarily during twilight, i.e., at dawn and dusk.

Nocturnal

Describing organisms that are active primarily during the night and sleep during the day.

Diurnal

Describing organisms active during the day and resting at night; also pertains to daily cycles of light and darkness.

Biological Clocks

Biological clocks are internal mechanisms in organisms that regulate cycles of activity and rest, including sleep-wake cycles and hormonal changes, in accordance with environmental changes.