Outstanding stock of the Hall Corporation included 40,000 shares of $5 par common stock and 20,000 shares of 6%, $10 par non-cumulative preferred stock. In 2013, Hall declared and paid dividends of $8,000. In 2014, Hall declared and paid dividends of $24,000. How much of the 2014 dividend was distributed to preferred shareholders?
A) $16,000.
B) $28,000.
C) $12,000.
D) None of these answer choices are correct.

Question

Quizplus · Accepted Answer

The preferred shareholders receive 6% of the $10 par value, which is $0.60 per share. With 20,000 shares, they receive $12,000 in dividends for 2014.

Outstanding Stock of the Hall Corporation Included 40,000 Shares of $5