Question

Glow Corporation has 50,000 shares of preferred shares outstanding, with annual dividends paid at the rate of $1.50 per share. Glow also has 100,000 shares of common shares outstanding. If Glow declares a $250,000 dividend in 2013, each outstanding share of common shares would receive:

a) $1.17
b) $1.50
c) $2.50
d) $1.75

Answer 1

To find the dividend per common share, divide the total dividend by the total number of shares.

Step-by-step explanation:

To find out how much each outstanding share of common shares would receive, we need to first determine the total number of outstanding shares. Glow Corporation has 50,000 shares of preferred shares outstanding and 100,000 shares of common shares outstanding.

That means there are 150,000 total shares outstanding. To calculate the dividend per common share, we divide the total dividend of $250,000 by the total number of shares (150,000), giving us a dividend per common share of $1.67. Since none of the provided answer choices match exactly, the closest answer would be d) $1.75.