Final answer:
The preferred stockholders of Gladstone Company can expect to receive a total annual dividend of $335,790. This is obtained by multiplying the fixed dividend rate of 7% by the par value of $6, resulting in $0.42 per share, and then by the total number of shares issued (117,000).
Step-by-step explanation:
The preferred stockholders of Gladstone Company can anticipate receiving annual dividends of $335,790 each year if sufficient dividends are declared. This is calculated by multiplying the fixed annual dividend rate by the par value, and then by the total number of shares issued. The annual dividends that preferred stockholders can anticipate receiving can be calculated by multiplying the number of shares by the fixed annual dividend rate. In this case, the company issued 117,000 shares of preferred stock at $41 per share, with a fixed annual dividend rate of 7%.
To calculate the annual dividend per share, we use the following formula: Annual Dividend per Share = Par Value × Dividend Rate. In this case, it would be $6 (Par Value) × 0.07 (7% Dividend Rate), which equals $0.42 per share. To find the total annual dividend, we then multiply the annual dividend per share by the total number of shares, giving us $0.42 × 117,000 = $49,140. However, this is the amount for all shares combined. To understand the per share calculation: $0.42 (Annual Dividend per Share) = 7% of $6 (Par Value), not the selling price of $41 per share.