a-company-declares-a-dividend-of-180000-preferred-stockholders-are-entitled-to-1

Question

A company declares a dividend of $180,000. Preferred stockholders are entitled to $120,000. If the company only pays $100,000, what happens?

Accepted Answer

Preferred stockholders receive $100,000, and common stockholders receive $0.

Answer

Preferred stockholders receive $120,000, and common stockholders receive $0.

Answer

Preferred stockholders receive $100,000, and common stockholders receive $20,000.

Answer

Preferred stockholders receive $80,000, and common stockholders receive $20,000.

A company declares a dividend of \$180,000. Preferred stockholders are entitled to \$120,000. If the company only pays \$100,000, what happens?