The parent company acquires all of a subsidiary$$s common stock but only $70$ percent of its preferred shares. This preferred stock pays a $7$ percent annual cumulative dividend. No dividends are in arrears at the current time. How is the noncontrolling interest$$s share of the subsidiary$$s income computed?

Multiple Choice

No allocation is made because the dividends have been paid.

As $30$ percent of the subsidiary$$s preferred dividend.

As $30$ percent of the subsidiary$$s income after all dividends have been subtracted.

Income is assigned to the preferred stock based on total par value and $30$ percent of that amount is allocated to the noncontrolling interest.