A Company Has Outstanding 9 Million Shares of $2 Par

question 49

Multiple Choice

A company has outstanding 9 million shares of $2 par value common stock and 1 million shares of $4 par value preferred stock.The preferred stock has an 8% dividend rate.The company declares $600,000 in total dividends for the year.Which of the following is true if dividends in arrears are $30,000?

• A)Preferred stockholders will receive $350,000.Common stockholders will receive $250,000.
• B)Preferred stockholders will receive $60,000.Common stockholders will receive $540,000.
• C)Preferred stockholders will receive $320,000.Common stockholders will receive $280,000.
• D)Preferred stockholders will receive $90,000.Common stockholders will receive $510,000.

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Definitions:

Process Reengineering

The radical redesign of core business processes to achieve dramatic improvements in productivity, efficiency, and quality.

Total Quality Management

An organizational approach focusing on continuous improvement in all aspects of business, aimed at achieving long-term customer satisfaction.

Timeliness to Market

The strategy of bringing a product or service to the market at the right time to maximize its acceptance or competitive advantage.

Process Reengineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical areas such as cost, quality, service, and speed.