Answer:
b. 22,000
Explanation:
The computation of amount of dividends common shareholders is shown below:-
Amount of annual preferred stock dividend that preferred stockholders are supposed to get.
= $400,000 par value × 6% = $24,000
Total Cash Paid to Paid to Dividends in Arrears at
Dividend paid Preferred Common Year end
2011 $40,000 $24,000 $16,000
2012 $20,000 $20,000 $4,000
2013 $50,000 $28,000 $22,000
Total $110,000 $72,000 $38,000
Amount of Dividend Common Shareholders will receive in 2013 = $ 22,000
This is because, out of $ 50,000 dividend declared, $ 28000 will be for preferred stockholders ($24000 annual + $4000 arrears)
