For the year just ended, a company reports net income of $3,200,000. There are 750,000 shares authorized, 600,000 shares issued and 500,000 shares of common stock outstanding. The company has no preferred stock. If the board of directors declares a $1 per share dividends, the total amount of dividends paid is:

Question

Quizplus · Accepted Answer

The total amount of dividends paid would be the number of outstanding shares (500,000) multiplied by the dividend per share ($1), which is:

500,000 x $1 = $500,000

Therefore, the correct answer is C) $500,000.

For the Year Just Ended, a Company Reports Net Income