Looper, Inc. has 25,000 shares of 6%, $100 par value, noncumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2010. There were no dividends declared in 2009. The board of directors declares and pays a $250,000 dividend in 2010. What is the amount of dividends received by the common stockholders in 2010?

Question

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The preferred stockholders receive 6% of $100 par value per share, which is $6 per share. With 25,000 shares, they receive $150,000. The remaining $100,000 of the $250,000 total dividend goes to the common stockholders.