CAB Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017. What is the annual dividend on the preferred stock?

Question

Quizplus · Accepted Answer

The annual dividend on the preferred stock is calculated as 5% of the par value ($100) per share, which equals $5 per share. With 1,000 shares, the total annual dividend is $5,000.

CAB Inc Has 1,000 Shares of 5%, $100 Par Value, Cumulative