A corporation has 15,000 shares of 10%, $50 par cumulative preferred stock outstanding and 25,000 shares of no-par common stock outstanding. Dividends of $37,500 are in arrears. At the end of the current year, the corporation declares a dividend of $120,000.
What is the dividend per share for preferred shares and for common shares?

Question

Quizplus · Accepted Answer

C) Calculations: Preferred: $50 × 10% × 15,000 shares = $75,000 current year + $37,500 in arrears = $112,500 / 15,000 shares = $7.50
Common: $120,000 - $112,500 = $7,500 / 25,000 shares = $0.30

A Corporation Has 15,000 Shares of 10%, $50 Par Cumulative