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% noncumulative, with $100 par value. On October 15, 2015, the company declares a total dividend payment of $40,000. What is the amount of dividend that will be paid for each share of common stock?

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The preferred stock dividend is 4% of $100 par value, which is $4 per share. With 2,000 preferred shares, the total preferred dividend is $8,000. The remaining $32,000 ($40,000 total dividend - $8,000 preferred dividend) is distributed among 40,000 common shares, resulting in $0.80 per common share.

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