Zeta Co. has outstanding 100,000 shares of $100 par value cumulative preferred stock which has a dividend

Question:

Zeta Co. has outstanding 100,000 shares of $100 cumulative preferred stock which has a rate of 6 percent. The company has not declared any cash dividends on the preferred stock for the last three years. Calculate the amount of dividends in arrears on Zeta’s preferred stock and briefly explain how this amount will be known to investors and creditors who may use the company’s financial statements.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...