Texas Inc.has 10,000 shares of 6%,$125 par value,cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31.What is the annual dividend on the preferred stock?

Question

Quizplus · Accepted Answer

The annual dividend on the preferred stock is calculated as follows:
$125 par value x 6% annual dividend rate = $7.50 annual dividend per share
$7.50 annual dividend per share x 10,000 shares = $75,000 in total preferred stock dividends. Therefore, the correct choice is A.

Texas Inchas 10,000 Shares of 6%,$125 Par Value,cumulative Preferred Stock and and 50,000