A company has 20,000 shares of preferred shares outstanding paying 0.30 cents dividend per share.It also has 110,000 shares of common stock outstanding.If the company pay a total of $15,000 dividend and the preferred stock is non cumulative,what is the amount of dividend common stockholders will receive?

Question

Quizplus · Accepted Answer

Since the preferred stock is non-cumulative, the company only needs to pay the preferred stockholders the current year's dividend before paying any dividend to the common stockholders. The total dividend paid to the preferred stockholders is 20,000 x 0.30 = $6,000. Therefore, the remaining $15,000 - $6,000 = $9,000 will be paid to the common stockholders. Thus, the answer is C) $9,000.

A Company Has 20,000 Shares of Preferred Shares Outstanding Paying