Answer:
The total amount of dividends paid by Aria’s, Inc. is <u>$30,000</u>.
Explanation:
The total amount of dividends paid by Aria’s, Inc. can be obtained by adding the dividends paid to common shareholders and preferred stockholders as follows:
Annual dividend paid to cumulative preferred stockholders = Number of cumulative preferred shares * Par value of the share * Dividend rate = 1,000 * $100 * 5% = $5,000
Since Aria’s, Inc. has has not paid dividends in two years, the total dividend paid to cumulative preferred stockholders is as follows:
Total dividend paid to cumulative preferred stockholders = Annual dividend paid to cumulative preferred stockholders * 2 = $5,000 * 2 = $10,000
Dividend paid to common stockholders = Number of common shares * Common shares dividend per share = 10,000 * $2 = $20,000
Therefore, we have:
Total amount of dividends paid = Total dividend paid to cumulative preferred stockholders + Dividend paid to common stockholders = $10,000 + $20,000 = $30,000
Therefore, the total amount of dividends paid by Aria’s, Inc. is <u>$30,000</u>.
