Orleans Company Was Incorporated on 1 January 2013

Multiple Choice

Orleans Company was incorporated on 1 January 2013. Orleans issued 4 000 shares of ordinary shares and 500 shares of preference shares on that date. The preference shares are cumulative, $100 par, with an 8% dividend rate. Orleans has not paid any dividends yet. In 2016, Orleans had its first profitable year, and on 1 November 2016, Orleans declared a total dividend of $28 000. What is the total amount that will be paid out to preference shareholders?

A) $4 000
B) $16 000
C) $28 000
D) $3 200