A Company Has Outstanding 10 Million Shares of $2 Par

question 64

Multiple Choice

A company has outstanding 10 million shares of $2 par common shares and 1 million shares of $4 par preferred shares.The preferred shares have a $0.32 dividend per share.The company declares $300,000 in total dividends for the year.Which of the following is true if the preferred shareholders only have a current dividend preference?

• A)Preferred shareholders will receive the entire $300,000,and they must also be paid $20,000 before the end of the current accounting period.Common shareholders will receive nothing.
• B)Preferred shareholders will receive $24,000 or 8% of the total dividends.Common shareholders will receive the remaining $276,000.
• C)Preferred shareholders will receive the entire $300,000,and they must also be paid $20,000 sometime in the future before common shareholders will receive anything.
• D)Preferred shareholders will receive the entire $300,000,but will receive nothing more relating to this dividend declaration.Common shareholders will receive nothing.

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Definitions:

Descriptive Statistics

Statistical methods that summarize and organize data in an informative way, without drawing conclusions beyond the data itself.

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, such as the mean, median, or mode.

Statistical Process Control

A method used in manufacturing and business processes to control quality by monitoring and controlling the process through statistical analysis.

Statistical Analysis

The process of collecting, analyzing, interpreting, and presenting data to gain insights or support decision-making.