Assuming That There Are No Dividends in Arrears, How Are

Multiple Choice

Assuming that there are no dividends in arrears, how are total dividends allocated between ordinary shares and preference shares?

A) Preference shareholders are paid their required annual dividend with the balance going to ordinary shareholders.
B) On the basis of their relative par values.
C) On the basis of their relative market values.
D) Cannot be determined with the information given.