The Board of Directors of Ross Corp. has decided to distribute $300,000 to its stockholders. There are 62,000 shares of 6% preferred stock, $75 par value, and 4,800 shares of common stock. What is the dividend per share to be paid to common stockholders?

Question

Quizplus · Accepted Answer

First, calculate the total preferred dividend: 62,000 shares * $75 par value * 6% = $279,000. Subtract this from $300,000 to get $21,000 for common stockholders. Divide $21,000 by 4,800 common shares to get $4.38 per share.