From its inception through the year of 2014,Quicksales Inc.was profitable and made strong dividend payments each year.In the year 2015,Quicksales had major losses and paid no dividends.In 2016,the company started making large profits again,and they were able to pay dividends to all shareholders-both common and preferred.There are 1,500 shares of cumulative,7% preferred stock outstanding.The preferred stock has a par value of $100.What is the total amount of dividends that should be paid to the preferred stockholders in December,2016?

Question

Quizplus · Accepted Answer

To calculate the dividend amount for preferred stockholders, we need to use the following formula:

Dividend for preferred stock = Total preferred shares * Par value per share * Dividend rate

Total preferred shares = 1,500
Par value per share = $100
Dividend rate = 7% = 0.07

Therefore, Dividend for preferred stock = 1,500 * $100 * 0.07 = $10,500

Hence, the total amount of dividends that should be paid to the preferred stockholders in December 2016 is $10,500.

Option D is the correct answer.

From Its Inception Through the Year of 2014,Quicksales Inc