Test - Ch. 11 and 12 3 2 Wally Company declares and pays $30,000 in dividends Wally Company has the following stock outstanding: points Saved 00:36:48 Preferred stock: 6%, $20 par value, 2,000 shares outstanding. This preferred stock has cumulative dividend preference. Two years of preferred dividends were in arrears. Common stock: $10 par value, 5,000 shares outstanding. Wally issues a $30,000 dividend this year. Which of the following is true? Mc Graw Hill Education Multiple Choice Common stockholders receive $22,800 in preferred dividends this year, which is more than what the preferred stockholders receive. Common stockholders receive $30,000 in dividends this year, because common stock has greater risk and also greater rewards. Preferred stockholders receive $4,800 in dividends this year, due to having dividends in arrears. Preferred stockholders have preference because they receive a greater dollar amount of dividends than what common stockholders receive. Common stockkholders receive $0 in dividends this year because the entire $30,000 dividend goes to preferred stockholders with cumulative rights. Help Save & Exit Submit