Paul Bunyan is the owner of noncumulative 8 percent preferred stock in the Broadview Corporation, which had no earnings or profits in 2009 In 2010, the corporation had large profits and a surplus from which it might properly have declared dividends The directors refused to do so, however, instead u...

a Under the majority rule Bunyan is not entitled to dividends ...

Paul Bunyan is the owner of noncumulative 8 percent preferred stock in the Broadview Corporation, which had

Question:

Paul Bunyan is the owner of noncumulative 8 percent preferred stock in the Broadview which had no earnings or profits in 2009. In 2010, the had large profits and a surplus from which it might properly have declared dividends. The directors refused to do so, however, instead using the surplus to purchase goods necessary for the corporation’s expanding business. The earned a small profit in 2011. The directors at the end of 2011 declared a 10 percent on the and an 8 percent on the preferred stock without paying preferred dividends for 2010.
(a) Is Bunyan entitled to dividends for 2009? For 2010?
(b) Is Bunyan entitled to a of 10 percent rather than 8 percent in 2011?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...