Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 6%, €50 par value preference shares which it sold for €54 per share at the beginning of 2015. The company has never paid preference dividends. As of December 31, 2017, dividends in arrears are

Question

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The annual dividend per share is 6% of €50, which is €3. With 11,000 shares, the annual dividend is €33,000. Since dividends have not been paid for 3 years (2015, 2016, 2017), the total dividends in arrears are 3 x €33,000 = €99,000.

Freidrichs Company Has Issued and Outstanding 11,000 Shares of Cumulative