Fleur Ott owns 100 shares of Armstrong Tool Company cumulative preferred shares. The dividend is $6 per share. Armstrong's board of directors omitted the preferred dividends in 2000, 2001, and 2002. In 2003, the dividend was resumed. Which of the following represents the amount that Armstrong Tool owes Ott?

Question

Quizplus · Accepted Answer

Cumulative preferred shares accumulate unpaid dividends. Armstrong Tool owes Ott for 2000, 2001, 2002, and 2003, totaling 4 years of dividends: 4 x $600 = $2,400.

Fleur Ott Owns 100 Shares of Armstrong Tool Company Cumulative