If a company has 3,000 shares authorized and 2,000 have been issued, the annual dividends on $18 par 3% preferred stock is $1,620.

Question

Quizplus · Accepted Answer

The number of authorized and issued shares is not relevant to the calculation of dividend payments on preferred stock. The calculation of annual dividends on preferred stock is based on the par value, dividend rate, and number of shares of preferred stock outstanding. Therefore, the information provided about the authorized and issued shares is not useful in determining the accuracy of the statement about the annual dividends.

If a Company Has 3,000 Shares Authorized and 2,000 Have