Burkert Company has 50,000 shares of $1 par value common stock issued and outstanding. The company also has 9000 shares of $100 par value, 4% cumulative preferred stock outstanding. Burkert did not pay the preferred dividends in 2016 and 2017. For the common stockholders to receive a dividend in 2018, the board of directors must declare dividends in excess of:

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The preferred stock is cumulative, meaning missed dividends must be paid before common stockholders receive dividends. The annual preferred dividend is 9000 shares * $100 * 4% = $36,000. Since dividends were not paid in 2016 and 2017, $36,000 * 2 = $72,000 is owed for those years. Adding the 2018 dividend of $36,000, the total is $108,000.

Burkert Company Has 50,000 Shares of $1 Par Value Common