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 3 years of missed dividends (2000, 2001, 2002) plus the current year (2003). That's 4 years x $6 per share x 100 shares = $2,400.

Fleur Ott Owns 100 Shares of Armstrong Tool Company Cumulative