A corporation has 10,000 shares of 20%,$60 par cumulative preferred stock outstanding and 32,000 shares of no-par common stock outstanding.Preferred dividends of $22,000 are in arrears.At the end of the current year,the corporation declares a dividend of $236,000.What is the dividend per share for preferred stock and for common stock? (Round your answer to the nearest cent.)

Question

Quizplus · Accepted Answer

Total amount paid to preferred shareholders: ($60 × 20% × 10,000 shares current year) + $22,000 in arrears = $142,000
Dividend per preferred share = $142,000 / 10,000 shares = $14.20
Dividend per common share: $236,000 - $142,000 = $94,000.00 / 32,000 shares = $2.94

A Corporation Has 10,000 Shares of 20%,$60 Par Cumulative Preferred