Gladstone Company issues 200,000 shares of preferred stock for $40 a share.The stock has fixed annual dividend rate of 5% and a par value of $3 per share.If sufficient dividends are declared,preferred stockholders can anticipate receiving dividends of:

Question

Quizplus · Accepted Answer

Preferred dividend = Number of shares outstanding × Par value × Annual dividend rate
= 200,000 shares × $3 per share × 0.05 = $30,000 (if declared)

Gladstone Company Issues 200,000 Shares of Preferred Stock for $40