From its inception through the year of 2016, Quicksales, Inc was profitable and made strong dividend payments each year
In the year 2017, Quicksales had major losses and paid no dividends. In 2018, the company started making large profits again, and they were able to pay dividends to all shareholders-both common and preferred. There are 2,000 shares of cumulative, 10% preferred stock outstanding. The preferred stock has a par value of $100. What is the total amount of dividends that should be paid to the preferred stockholders in December, 2018?
A) $60,000
B) $90
C) $20,000
D) $40,000
D .D)
Par value $100
DPS $10
No. of preferred stock x 2,000
Annual preferred dividend $20,000
The total amount of dividends which should be paid to the preferred stockholders = $20,000 x 2 = $40,000
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