Kuhns Corp

Multiple Choice

Kuhns Corp. has 200,000 shares of preferred stock outstanding that is cumulative and 100,000 common stock outstanding. The preferred dividend is $3.00 per share and has not been paid for three years. If Kuhns earned $1 million this year, what could be the maximum payment to the preferred stockholders on a per share basis?

A) $9.00 per share
B) $15.00 per share
C) $6.00 per share
D) $5.00 per share