Glow Corporation has 50,000 shares of preferred shares outstanding,with annual dividends paid at the rate of $1.50 per share.Glow also has 100,000 shares of common shares outstanding.If Glow declares a $250,000 dividend in 2013,each outstanding share of common shares would receive:

Question

Quizplus · Accepted Answer

The total dividend payout for the preferred shares can be calculated as follows:

Total dividend payout for preferred shares = Number of preferred shares x Dividend per share
= 50,000 x $1.50
= $75,000

Subtracting this from the total dividend payout of $250,000 leaves us with the dividend available for common shares:

Dividend available for common shares = Total dividend payout - Preferred dividend payout
= $250,000 - $75,000
= $175,000

To calculate the dividend per share for common shares, we divide the dividend available by the number of outstanding common shares:

Dividend per share for common shares = Dividend available for common shares / Number of common shares
= $175,000 / 100,000
= $1.75

Therefore, each outstanding share of common shares would receive a dividend of $1.75.

Glow Corporation Has 50,000 Shares of Preferred Shares Outstanding,with Annual