Question

Berzett Industrial Products has both common and noncumulative preferred stock outstanding. The dividends on these stocks are $1.10 per quarter per share of common and $3.50 per quarter per share of preferred. The company has not paid any dividends for the past two quarters but is expected to pay dividends on both the common and the preferred stock next quarter. What is the minimum amount the firm must pay per share to its preferred stockholders next quarter if it plans to pay a common dividend

Answer 1

Answer:

$3.50

Explanation:

Based on the information the MINIMUM AMOUNT the firm must pay per share to its PREFERRED STOCKHOLDERS next quarter if it plans to pay a common dividend will be $3.50 reason been that we were told that the dividends on the stocks was the amount of $3.50 PER QUARTER PER SHARE OF PREFERRED which means that The firm will have to pay only the CURRENT DIVIDEND because the PREFERRED STOCK IS NONCUMULATIVE.

Therefore the Minimum preferred dividend is $3.50