Ace Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?
A) $50 per share
B) $50,000 in total
C) $5,000 in total
D) $0.50 per share

Question

Quizplus · Accepted Answer

The annual dividend on the preferred stock is calculated as 5% of the par value ($100) per share. Therefore, the dividend per share is $5 (5% of $100), and with 10,000 shares, the total annual dividend is $50,000.

Ace Inc Has 10,000 Shares of 5%, $100 Par Value, Cumulative