1. A firm has issued cumulative preferred stock with a $100 par value and a 12 percent annual dividend. For the past two years, the board of directors has decided not to pay a dividend. At the end of the current year, the preferred stockholders must be paid ________ prior to paying the common stockholders.
2. a. $0/share
3. b. $12/share
4. c. $24/share
5. d. $36/share

ANS: D