Paul Bunyan is the owner of noncumulative 8 percent preferred stock in the Broadview Corporation, which had no earnings or profits in 2012 In 2013, the corporation had large profits and a surplus from which it might properly have declared dividends However, the directors refused to do so, using the...

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 2012. In 2013, the had large profits and a surplus from which it might properly have declared dividends. However, the directors refused to do so, using the surplus instead to purchase goods necessary for the corporation's expanding business. The earned a small profit in 2014. The directors at the end of 2014declared a 10 percent on the and an 8 percent on the preferred stock without paying preferred dividends for 2013.
a. Is Bunyan entitled to dividends for 2012? For 2013?
b. Is Bunyan entitled to a of 10 percent rather than 8 percent in 2014?
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...