Davis Aquatic Corp

Multiple Choice

Davis Aquatic Corp.has 300,000 shares of preferred stock outstanding that is cumulative.The dividend is $8.00 per share and has not been paid for 2 years.If Davis Aquatic Corp.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) $10.00 per share
B) $16.00 per share
C) $2.00 per share
D) $8.00 per share