Subject: Preference and Ordinary Dividends

Montreal Trade, Inc. has 10,000 shares of 7% $50 par preference shares, and 100,000 shares of $4 par ordinary shares outstanding. Two years' preference dividends are in arrears. Montreal Trade declared a cash dividend large enough to pay the preference dividends in arrears, the preference dividends for the current period, and a $1.50 dividend to ordinary. What is the total amount of the dividend? Show computations.

a. $105,000 b. $150,000 c. $220,000 d. $255,000