Assume a company’s preferred stock is cumulative with a call provision and has dividends in arrears. The amount of stockholders’ equity allocated to preferred stockholders is equal to the number of shares outstanding times the
A. sum of the par value per share plus any liquidation premium per share, plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, but only if dividends have been declared.
B. sum of the par value per share, plus any liquidation premium per share, plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, regardless of whether dividends have been declared.
C. call price plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, but only if dividends have been declared.
D. call price plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, regardless of whether dividends have been declared.
Answer:D
Assume a company’s preferred stock is cumulative with a call provision and has dividends in arrears. The amount of stockholders’ equity allocated to preferred stockholders is equal to the number of shares outstanding times the
A. sum of the par value per share plus any liquidation premium per share, plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, but only if dividends have been declared. B. sum of the par value per share, plus any liquidation premium per share, plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, regardless of whether dividends have been declared. C. call price plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, but only if dividends have been declared. D. call price plus the sum of any preferred dividends in arrears, plus the current year’s dividend requirement, regardless of whether dividends have been declared.