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Mesha is considering investing in a new company. Company A has a $5 per share dividend and no dividends in arrears. Company B has
Mesha is considering investing in a new company. Company A has a $5 per share dividend and no dividends in arrears. Company B has an $8 per share dividend and $40,000 dividends in arrears. Which company should Mesha choose, and why? O Company B, they pay more per share, which will ultimately lead to more profits if the company does well. O Company B, they pay more per share, and they have $40,000 set aside to pay out to preferred stockholders. O Company A, $5 per share is a good rate, and not having money in arrears shows that they are very profitable. O Company A, they may pay less per share, but they do not have any undeclared dividends.
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