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Arundel Corporation has 7,000 shares of 6% $100 par cumulative preferred stock outstanding. Arundel paid all preferred dividends due for the year 2019 but paid no dividends in 2020. What amount will Arundel need to pay preferred shareholders in 2021 if they wish to pay a dividend to common shareholders?

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abiolataiwo2015

The amount will Arundel need to pay preferred shareholders in 2021 if they wish to pay a dividend to common shareholders is 84,000

Using this formula

2021 preferred shareholders(per year)=Per dividend * Dividend rate

Let plug in the formula

2021 preferred shareholders(per year)=[(7,000*$100)*6%]

2021 preferred shareholders(per year)=($700,000*6%)*2

2021 preferred shareholders(per year)=42,000*2

2021 preferred shareholders(per year)=84,000

Inconclusion The amount will Arundel need to pay preferred shareholders in 2021 if they wish to pay a dividend to common shareholders is 84,000

Learn more about preferred shareholders here:

https://brainly.com/question/3518273

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