A corporation has 10,000 shares of 10%,$100 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding.At the end of the current year,the corporation declares a dividend of $120,000.What is the dividend per share for preferred stock and for common stock?

Question

Quizplus · Accepted Answer

The preferred stock dividend is calculated as 10% of the $100 par value, which is $10 per share. With 10,000 preferred shares, the total preferred dividend is $100,000. The remaining $20,000 of the $120,000 total dividend is distributed to the 20,000 common shares, resulting in $1 per common share.

A Corporation Has 10,000 Shares of 10%,$100 Par Noncumulative Preferred