After Payment of All Claims Apart from Payments to Capital

question 14

Multiple Choice

After payment of all claims apart from payments to capital contributors, the liquidator prepared the following statement of shareholders' equity for Train Ltd:
$\begin{array}{llcc} \text { Preference shares \( (20000) \) } &40000 \\ \text { Ordinary shares (100 000) } &300000\\ \text {Accumulated losses } &\underline{(155000) }\\ \text { Total} &185000\\\end{array}$

There is $125 000 cash remaining for distribution and all shares are fully paid.What is the dividend per preference share if preference shareholders rank equally with ordinary shareholders? (Note: Round amounts to nearest cent.)

• A)$6.25
• B)$0.50
• C)$1.04
• D)$9.25

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