Torino Company has 2600 shares of $20 par value, 5.5% cumulative and nonparticipating preferred stock and 26,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $2500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:
A. $360.
B. $2860.
C. $5720.
D. $2500.
E. $3220.
Answer: E
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