ABC corporation declares a $2 million dividend. It had issued 1 million shares of common stock and 500 thousand shares of preferred stock. If preferred shares have a par value of $50 and a preferred dividend of 4 percent, what is the preferred dividend?

Question

Quizplus · Accepted Answer

The preferred dividend is calculated as 4% of the par value of $50 for 500,000 shares. So, $50 * 4% * 500,000 = $1,000,000.

ABC Corporation Declares a $2 Million Dividend