Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 8%, €50 par value preference shares which it sold for €54 per share at the beginning of 2009.The company has never paid preference dividends.As of December 31, 2011, dividends in arrears are

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The annual dividend for the preference shares is 8% of the €50 par value, which is €4 per share. With 11,000 shares, the annual dividend is €44,000. Since the company has not paid dividends for three years (2009, 2010, and 2011), the dividends in arrears are 3 years x €44,000 = €132,000.

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