Question 7 (2 points) Saved Looper, Inc. has: - 25,000 shares of $$ 5 \%, £ 100 $$ par value, noncumulative preference shares outstanding at December 31,2020 . The board of directors declares and pays a $$ £ 300,000 $$ dividend in 2020 . $$ £ 125,000 $$ $$ £ 175,000 $$ $$ £ 300,000 $$ $$ £ 0 $$

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To determine how much dividend is paid to the preference shareholders of Looper, Inc., we first need to calculate the total dividend entitlement for the preference shares.

1. **Calculate the total dividend entitlement for preference shares:**
   - Number of preference shares = 25,000
   - Par value per share = £100
   - Dividend rate = 5%

Total dividend entitlement = Number of shares × Par value × Dividend rate
   $$
   = 25,000 \text{ shares} \times £100 \times 5\% = 25,000 \times 100 \times 0.05 = £125,000
   $$

2. **Determine the dividend declared and paid:**
   - Total dividend declared and paid in 2020 = £300,000

3. **Distribute the dividend:**
   - Since the preference shares are noncumulative, they will receive their full entitlement of £125,000 before any dividends are paid to ordinary shareholders.

4. **Calculate the remaining dividend after preference shares:**
   - Remaining dividend after paying preference shares = Total dividend paid - Total dividend entitlement for preference shares
   $$
   = £300,000 - £125,000 = £175,000
   $$

Thus, the preference shareholders will receive their full entitlement of **£125,000**, and the remaining **£175,000** can be distributed to ordinary shareholders.

Therefore, the answer is:
**£125,000**
The preference shareholders will receive £125,000.

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