A noncumulative preferred stock pays a quarterly dividend of $1.30. The firm did not pay this dividend last quarter. How much will the company have to pay to the preferred shareholders per share this quarter if it wishes to also pay a common stock dividend?

Question

Quizplus · Accepted Answer

Noncumulative preferred stock does not accumulate unpaid dividends. Therefore, the company only needs to pay the current quarter's dividend of $1.30 per share to preferred shareholders.

A Noncumulative Preferred Stock Pays a Quarterly Dividend of $1