Solaris Inc. has 2000 shares of 5% $10 par value cumulative preferred stock and 50000 shares of $1 par value common stock outstanding at December 31 2017. What is the annual dividend on the preferred stock?

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Quizplus · Accepted Answer

The annual dividend on the preferred stock is calculated as 5% of the par value ($10) per share. Therefore, 5% of $10 is $0.50 per share. With 2000 shares, the total annual dividend is 2000 shares * $0.50 = $1000.