Assume the Following Capital Structure

question 11

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 (2007 - 2009) .
Common stock,$100 par value,2,000 shares issued and outstanding.
Total dividends declared and paid in 2010 were $50,000.How much of the 2010 dividend will be paid to the common stockholders assuming the preferred stock is cumulative?

• A)$12,000
• B)$50,000
• C)$47,000
• D)$38,000

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