How much will be distributed to the preferred

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Problem 1: Black Corporation declared $50,000 cash dividends to shareholders. The corporation has 4,000 shares of $25-par, 5% preferred stock, and 15,000 shares of $10-par common stock. The preferred stock is non-cumulative. How much will be distributed to the preferred and common stockholders on the date of payment?

Option 1: $0 to preferred, $50,000 to common
Option 2: $5,000 to preferred, $45,000 to common
Option 3: $2,500 to preferred, $47,500 to common
Option 4: None are correct

Reference no: EM132950828

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