Kuhns Corp

Multiple Choice

Kuhns Corp.has 200,000 shares of preferred stock outstanding that is cumulative.The dividend is $6.50 per share and has not been paid for 3 years.If Kuhns retained earnings and after tax income this year total $3 million,what could be the maximum payment to the preferred shareholders on a per share basis?

A) $19.50 per share
B) $15.00 per share
C) $13.00 per share
D) $6.50 per share