Druffle Industries Has 5,000 Shares of $100 Par, 7% Noncumulative

question 21

Multiple Choice

Druffle Industries has 5,000 shares of $100 par, 7% noncumulative, nonparticipating preferred stock issued and outstanding. In 2016, the board of directors declared cash dividends of $75,000. The amount of dividends to be distributed to preferred shareholders is:

• A)$350.
• B)$35,000.
• C)$40,000.
• D)$75,000.
• E)$110,000.

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Definitions:

Criterion

A standard, rule, or test by which something can be judged or measured, often used in decision-making or evaluation processes.

Core Principles

Fundamental beliefs or values that serve as the foundation for behavior, decision-making, and actions within an organization or individual's life.

Professional Selling

The process and activities required to effectively develop, manage, enable, and execute a mutually beneficial, interpersonal exchange of goods and/or services for equitable value.

Break-Even Point

the point at which total costs and total revenue are equal, meaning a business is neither making a profit nor taking a loss, serving as a critical financial analysis metric.