Reference no: EM133037111

Question - A company has 10,000 shares of 6 percent, $50 par value preferred stock and 20,000 shares of common stock without par value outstanding. The preferred stock is cumulative. Retained earnings total $200,000. If one year's dividends on the preferred stock are in arrears in addition to the current year, what portion of a total of $96,000 in dividends to be declared by the board of directors would go to each class of stock?

A. Preferred $32,000, common $64,000

B. Preferred $33,000, common $63,000

C. Preferred $30,000, common $66,000

D. Preferred $60,000, common $36,000