Question

There are 7,500 shares of $10 par value participating 9 percent preferred stock outstanding, and 32,500 shares of common stock outstanding. The common stock cash dividend is $.50 per share, and total dividends of $50,000 are distributed. Remaining dividends are shared equally between common and preferred stockholders. Round your answers to two decimal places, if necessary.

Answer 1

To calculate the distribution of dividends in this scenario, first calculate the total amount of dividends distributed to common stockholders. Then, calculate the remaining amount of dividends and divide it equally between common and preferred stockholders. Finally, calculate the total amount of dividends distributed to preferred stockholders by multiplying the number of preferred shares by the dividend per share.

Step-by-step explanation:

To calculate the distribution of dividends in this scenario, we need to follow several steps:

Calculate the total amount of dividends distributed to common stockholders: 32,500 shares x $0.50 dividend per share = $16,250.

Calculate the remaining amount of dividends: $50,000 - $16,250 = $33,750.

Divide the remaining amount of dividends equally between common and preferred stockholders: $33,750 / (7,500 shares + 32,500 shares) = $0.75 per share.

Multiply the number of preferred shares by the dividend per share to calculate the total amount of dividends distributed to preferred stockholders: 7,500 shares x $0.75 dividend per share = $5,625.

Therefore, the total amount of dividends distributed to common stockholders is $16,250, and the total amount of dividends distributed to preferred stockholders is $5,625.

Answer 2

add the answers then subtract

Step-by-step explanation:

hope this is right