Question
A company has 1,000 shares of $50 par value, 4.5% cumulative, preferred stock and 10,000 shares of $10 par value common stock outstanding. The company
A company has 1,000 shares of $50 par value, 4.5% cumulative, preferred stock and 10,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $1,000 in its first year of operation and $5,800 in its second year of operation. How much of the second year cash dividend will be paid to the preferred and common stockholders?
A. Preferred = $1,250 and Common = $4,550
B. Preferred = $3,500 and Common = $2,300
C. Preferred = $5,800 and Common = $0
D. Preferred = $1,000 and Common = $0
Preferred = $2,250 and Common = $3,550
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