Pearland Company Has 2 000 Shares of Preference Shares Outstanding

Multiple Choice

Pearland Company has 2 000 shares of preference shares outstanding. The preference shares have a value of $100, a 5% dividend rate, and are non- cumulative. If Pearland has sufficient funds to pay dividends, what is the total amount of dividends that will be paid out to preference shareholders?

A) $20 000
B) $10 000
C) $2 000
D) $5 000