Question

ABC Corp. has outstanding a 10% noncumulative preferred stock. Two years ago, ABC omitted its preferred dividend. Last year, it paid a dividend of $5 per share. In order to pay a dividend to common shareholders, each preferred share must be paid a dividend of

Answer 1

$10

Step-by-step explanation:

Since there is an outstanding of 10% non cumulative preferred stock and the last year dividend was paid for $5 per share

So, for each preference shares, the dividend must be paid for $10 as this is a straight and non cumulative one

also, the dividend is first paid to the preference shareholder dividend afterwards the equity shareholders is paid

Therefore the $10 would be the dividend paid for per preferred share