A Company Has Outstanding 9 Million Shares of $2 Par

question 31

Multiple Choice

A company has outstanding 9 million shares of $2 par value common shares and 1 million shares of $4 par value preferred shares.The preferred shares have $0.32 dividend per share.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 shareholders will receive $350,000.Common shareholders will receive $250,000.
• B)Preferred shareholders will receive $60,000.Common shareholders will receive $540,000.
• C)Preferred shareholders will receive $320,000.Common shareholders will receive $280,000.
• D)Preferred shareholders will receive $90,000.Common shareholders will receive $510,000.

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Definitions:

Link Method

A mnemonic strategy that involves forming a mental image connecting the items in a list to remember them more easily.

Mental Image

A representation of sensory experience held in the mind, which can be recalled or manipulated.

Acronym Method

A mnemonic device that involves using the initials of information to be remembered to form a word or phrase.

Link Method

A memory technique where you visualize items to be remembered in a way that they are linked together by a story or association.