Texas Inc. has 10,000 shares of 6%, $125 par value cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock?

Question

Quizplus · Accepted Answer

The annual dividend on the preferred stock is calculated as 6% of the par value ($125) times the number of shares (10,000). So, the annual dividend is 0.06 * $125 * 10,000 = $75,000.

Texas Inc Has 10,000 Shares of 6%, $125 Par Value Cumulative