Nichols,Inc.has 5,000 shares of 5%,$100 par value,cumulative preferred stock and 75,000 shares of $1 par value common stock outstanding at December 31,2012.What is the annual dividend on the preferred stock?

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Quizplus · Accepted Answer

The annual dividend on the preferred stock is calculated as 5% of the par value ($100) per share, multiplied by the number of preferred shares (5,000). This equals $25,000 (0.05 * $100 * 5,000).