A Firm Has an Outstanding Issue of 1,000 Shares of Preferred

question 78

Multiple Choice

A firm has an outstanding issue of 1,000 shares of preferred stock with a $100 par value and an 8 percent annual dividend. The firm also has 5,000 shares of common stock outstanding. If the stock is cumulative and the board of directors has passed the preferred dividend for the prior two years, how much must the preferred stockholders be paid prior to paying dividends to common stockholders at the end of third year?

• A) $8,000
• B) $16,000
• C) $24,000
• D) $25,000

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Definitions:

Networking

The action or process of interacting with others to exchange information and develop professional or social contacts.

External Monitoring

The act of observing and evaluating actions, performance, or conditions outside one's own organization or entity.

Work Unit

A functional group or department within an organization, consisting of individuals working together to achieve shared goals.

Coordination Of Activities

The process of organizing and aligning tasks and resources to ensure efficient operation and goal attainment within a group or organization.