Stevens Industries had the following preferred stock outstanding at the end of a recent year:
$5 par, 9% ........................................... 12,000 shares
$10 par, 9%, cumulative ............................ 6,000 shares
$25 par, 10%, cumulative, convertible ............ 9,000 shares
$50 par, 12%, nonparticipating .................. 10,000 shares
Required:
1. Determine the amount of annual dividends on each issue of preferred stock and the total annual dividend on all four issues.
2. Calculate what the amount of dividends in arrears would be if the dividends were omitted for 1 year?