Problem

Maliha, lnc. did not pay dividends on its $6.50, $50 par value, cumulative preferred stock during 2012 or 2013. Since 2008, 22,000 shares of this stock have been outstanding. Maliha, Inc. has been profitable since 2014 and is considering a cash dividend on its' common would stock that be payable in December 2014.

Calculate the amount of dividends that would have to be paid on the preferred stock before a cash dividend could be paid to the common stockholders.