The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Question

Quizplus · Accepted Answer

The cash dividends are paid on outstanding shares. Originally issued shares are 45,000, and 5,000 shares were reacquired, leaving 40,000 outstanding shares. At $2 per share, the total dividend is 40,000 x $2 = $80,000.

The Charter of a Corporation Provides for the Issuance of 100,000