Cannes Corporation has 120 shares of $107, 7% cumulative nonparticipating preferred stock and 1,200 shares of $16 par value common stock outstanding. The company paid $11,000 cash dividends including one-year dividends in arrears to preferred stockholders. Preferred stockholders received: (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The preferred stockholders receive dividends based on their cumulative preferred stock. The annual dividend per preferred share is 7% of $107, which is $7.49. For 120 shares, the annual dividend is $898.80. Since there is one year of dividends in arrears, the total dividend for preferred stockholders is $898.80 * 2 = $1,797.60, which rounds to $1,798.

Cannes Corporation Has 120 Shares of $107, 7% Cumulative Nonparticipating