How should XZY Corporation allocate the dividends

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Question - XYZ Corporation declared dividends of $1,000,000 for the year ended December 31, 2017 on June 30, 2018. These dividends are payable to all shareholders on record as of April 30, 2018. XZY Corporation has common shares with a value of $2,000,000 with a no-par-value. In addition to this the company has issued and outstanding $1,000,000 in preferred shares with a par value of $100 per share that carry a $10 per share dividend. The company has not paid these dividends in 3 years. How should XZY Corporation allocate the dividends under the following scenarios for the preferred Shares?

1. Preferred shares are non-cumulative and non participating

2. Preferred shares are cumulative and non-participating

3. Preferred shares non-cumulative and participating

4. Preferred shares are cumulative and participating

Reference no: EM132611434

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