Mercury Corp

Mercury Corp.has 10, 000 shares of $10 par, cumulative, 6% preferred stock and 10, 000 shares of common stock outstanding since being organized at the beginning of 2010.It declared its first dividend of $40, 000 at the end of 2012.This means that

A) all of the $40, 000 dividends available are paid to the preferred stockholders
B) all of the $40, 000 dividends available are paid to the common stockholders
C) an equal dollar amount is paid to each class of shareholder
D) 3 years' worth of dividends will be paid to preferred stockholders prior to paying anything to common stockholders

Correct Answer:

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