At the beginning of 2014,Emily Corporation issued 10,000 shares of $100 par,5%,cumulative,preferred stock for $110 per share.No dividends have been paid to preferred or common shareholders.What amount of dividends will a preferred shareholder owning 100 shares receive in 2016 if Emily pays $1,000,000 in dividends?

Question

Quizplus · Accepted Answer

The preferred shareholder will receive dividends for 2014, 2015, and 2016. Each year, the dividend is $5 per share (5% of $100 par value). For 100 shares, this is $500 per year. Over three years, the total is $1,500.

At the Beginning of 2014,Emily Corporation Issued 10,000 Shares of $100