Question

Netpass company has 600,000 shares of common stock authorized, 510,000 shares issued, and 240,000 shares of treasury stock. the company's board of directors declares a dividend of $0.65 per share of common stock. what is the total amount of the dividend that will be paid?

Answer 1

The total dividend amount will be $175,500

Step-by-step explanation:

The total amount of the dividend that will be paid can be calculated by multiplying the dividend per share ($0.65) by the number of issued shares (510,000) minus the number of treasury shares (240,000).

So, the total dividend amount will be:

Total Dividend = Dividend Per Share x (Number of Issued Shares - Number of Treasury Shares)

Total Dividend = $0.65 x (510,000 - 240,000)

Total Dividend = $0.65 x 270,000

Total Dividend = $175,500

Answer 2

The company has issued only 510,000 shares out of authorized 600,000 common stocks. As we know that dividend is paid only on issued shared, and treasury stocks do not get any dividend. So the total amount of dividend that will be paid = 0.65 * 510,000 = $331,500