Pug Corporation has 10,000 shares of $10 par common stock outstanding and 20,000 shares of $100 par, 6% noncumulative, nonparticipating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $150,000 dividend will be paid. What are the dividends per share for preferred and common, respectively?
A) $7.50; $0.
B) $6; $3.
C) $6; $1.50.
D) None of these answer choices are correct.

Question

Quizplus · Accepted Answer

Preferred: $6 per share × 20,000 = $120,000; $120,000 ÷ 20,000 shares = $6 per share
Common: ($150,000 - $120,000) ÷ 10,000 = $3 per share

Pug Corporation Has 10,000 Shares of $10 Par Common Stock