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 amount of dividend which will be paid for each share of common stock?

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 amount of dividend which will be paid for each share of common stock?

Quizplus · Accepted Answer

A) Calculations: 40,000 - [($100 × 4%) × $2000] = $32,000
$32,000/$40,000 = $0.80

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