Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000.
- What is the total amount of dividends that will be paid to the common shareholders?

Question

Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. 
- What is the total amount of dividends that will be paid to the common shareholders?

Quizplus · Accepted Answer

B) Calculations: 40,000 - [($100 × 4%) × $2000] = $32,000

Occidental Produce Company Has 40,000 Shares of Common Stock Outstanding