The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2-per-share dividend is declared?
A) $80,000
B) $10,000
C) $90,000
D) $100,00

Question

Quizplus · Accepted Answer

The cash dividends to be paid would be based on the number of shares outstanding, which is the original issued shares minus the reacquired shares (45,000 - 5,000 = 40,000 shares). At $2 per share, the total dividends would be 40,000 shares * $2/share = $80,000.

The Charter of a Corporation Provides for the Issuance of 100,000