A Firm Has Issued Cumulative Preferred Stock with a $100

Multiple Choice

A firm has issued cumulative preferred stock with a $100 par value and a 12 percent annual dividend. For the past two years, the board of directors has decided not to pay a dividend. The preferred stockholders must be paid ________ prior to paying the common stockholders.

A) $ 0/share
B) $12/share
C) $24/share
D) $36/share