Orleans, Inc was incorporated on January 1, 2014. Orleans issued 4,000 shares of common stock and 1,200 shares of preferred stock on that date. The preferred stock is cumulative, $100 par, with an 12% dividend rate. Orleans has not paid any dividends yet. In 2017, Orleans had its first profitable year, and on November 1, 2017, Orleans declared a total dividend of $63,000. What is the total amount that will be paid to preferred shareholders?
A) $14,400
B) $57,600
C) $13,200
D) $63,000
B .B)
Par value $100
DPS $12
No. of preferred stock x 1,200
Dividend paid to the preferred stockholders / year $14,400
Cumulative payment = [($100 x 12%) x 1,200] x 4 = $57,600
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