Occidental Produce Company has 40 000 shares of ordinary shares outstanding and 2 000 shares of preference shares outstanding. The preference shares pay annual dividends of $4 each. On 15 October 2014, the company declares a total dividend payment of $40 000. What is the total amount of dividends that will be paid to the ordinary shareholders?
A)$32 000
B)$4 500
C)$400
D)$40 000

Question

Quizplus · Accepted Answer

The preference shareholders receive $8,000 (2,000 shares * $4 each), leaving $32,000 for the ordinary shareholders ($40,000 total - $8,000 preference dividends).

Occidental Produce Company Has 40 000 Shares of Ordinary Shares