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 amount of dividend which will be paid for each share of ordinary shares?
A)$4.00
B)$1.00
C)$0.80
D)$400.00

Question

Quizplus · Accepted Answer

The preference shares receive their dividends first: 2,000 shares * $4 = $8,000. The remaining dividend amount for ordinary shares is $40,000 - $8,000 = $32,000. Dividing this by 40,000 ordinary shares gives $32,000 / 40,000 = $0.80 per ordinary share.

Occidental Produce Company Has 40 000 Shares of Ordinary Shares