Oxford Corporation has 120,000 shares of preferred stock,8% cumulative,$100 par value
It also has 1,400,000 shares of common stock,$0.01 par value.(The share information represents the numbers of shares issued and outstanding for both types of stock.)Dividends in arrears at the beginning of the year totaled $480,000.If Oxford's board of directors declares a total dividend of $1,650,000 to be distributed to preferred and common stockholders,how much will be paid to the common stockholders?

Question

Quizplus · Accepted Answer

The preferred stock dividend is 8% of $100 par value, which is $8 per share. With 120,000 shares, the annual preferred dividend is $960,000. Adding the $480,000 in arrears, the total preferred dividend is $1,440,000. Subtracting this from the total declared dividend of $1,650,000 leaves $210,000 for common stockholders.

Oxford Corporation Has 120,000 Shares of Preferred Stock,8% Cumulative,$100 Par