Moe Corporation pays its cumulative preferred stock $2.10 per share. There are 30,000 shares of preferred and 80,000 shares of common. In 2015, 2016, and 2017 no dividends were paid. Now, in 2018, $600,000 was declared. How much did each class of stock receive?

Question

Quizplus · Accepted Answer

Amount paid to preferred stockholders: 2.10 × 30,000 = $63,000; $600,000 - $63,000 × 4 (for 2015, 2016, 2017, 2018)= $252,000 for preferred; $600,000 - $348,000 = $348,000 for common.

Moe Corporation Pays Its Cumulative Preferred Stock $2