a-company-declares-a-total-dividend-of-20000-but-preferred-shareholders-are-due-

Question

A company declares a total dividend of $20,000, but preferred shareholders are due $25,000. What are the implications for both preferred and common shareholders?

Accepted Answer

Preferred shareholders receive the entire $20,000, and common shareholders receive nothing.

Answer

Preferred shareholders receive $20,000, and common shareholders receive $5,000.

Answer

Preferred shareholders receive $25,000, and common shareholders receive nothing.

Answer

Both preferred and common shareholders receive a proportionate share of the $20,000.

A company declares a total dividend of \$20,000, but preferred shareholders are due \$25,000. What are the implications for both preferred and common shareholders?