Final answer:
The preferred stockholder should receive $7 for their non-cumulative preferred stock, as missed dividend payments from the previous year do not accumulate. Shareholders typically invest in dividend-paying companies to receive a return on investment via a share of the profits or capital gains.
Step-by-step explanation:
In the scenario where a company has a non-cumulative preferred stock outstanding that pays a $7 dividend per year, and the dividends were not paid last year but will be paid this year, the preferred stockholder should receive $7. For non-cumulative preferred stocks, missed dividend payments do not accumulate. Unlike cumulative preferred stocks, where unpaid dividends from the past must also be paid before any dividends on common stock are issued, non-cumulative stocks do not have this provision. Therefore, the stockholder is only entitled to the dividend for the current year.
When investing in a company that pays dividends, shareholders expect to receive a portion of the company's profits as a return on their investment. Whether through regular dividend payments or potential capital gains from an increase in stock value, shareholders look for companies that will offer them a respectable rate of return. Stable companies, such as those in the utility sector or well-known consumer brands, often attract investors with consistent dividend payment policies.