Ace Inc. has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017. What is the annual dividend on the preferred stock?
A)$40 per share
B)$40,000 in total
C)$4,000 in total
D)$0.40 per share

Question

Quizplus · Accepted Answer

The annual dividend on the preferred stock is calculated as 4% of the $100 par value per share. Therefore, the dividend per share is $4 (4% of $100), and with 10,000 shares, the total annual dividend is $40,000.

Ace Inc Has 10,000 Shares of 4%, $100 Par Value, Cumulative