A corporation has 2,000 shares of 8 percent, $50 par-value preferred stock and 20,000 shares of $5 par-value common stock outstanding. If the board of the directors declares dividends totaling$80,000, the preferred stockholders will receive a dividend of:

Question

Quizplus · Accepted Answer

The preferred stockholders will receive a dividend of $4.00 a share because the dividend rate is 8 percent of the $50 par value, which equals $4.00 per share (0.08 * $50 = $4.00).

A Corporation Has 2,000 Shares of 8 Percent, $50 Par-Value