The Following Information Is Provided for Bold Company for the Year

question 38

Multiple Choice

The following information is provided for Bold Company for the year 2017: • Preferred stock, 6%, $50 par value, 1,000 shares issued and outstanding
• Common stock, $100 par value, 2,000 shares issued and outstanding
• Dividends in arrears for three prior years (2014­­-2016)
• Total dividends declared and paid in 2017 were $50,000.
How much of the 2017 dividend payment was paid to the common stockholders assuming the preferred stock is noncumulative?

• A)$12,000.
• B)$3,000.
• C)$47,000.
• D)$38,000.

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Definitions:

Quarterly Dividends

Dividends paid by a corporation to its shareholders at the end of each quarter of its fiscal year.

Stock Split

A corporate action where a company divides its existing shares into multiple shares, potentially making the stock more affordable for investors.

Trading Costs

Expenses associated with buying and selling financial instruments, including commissions, bid-ask spreads, and market impact costs.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall value of the shares remains the same.