Question

At the beginning of 2019, Sunshine Corporation issued 18,000 shares of $100 par, 7%, cumulative, preferred stock for $110 per share. No dividends have been paid to preferred or common shareholders. What amount of dividends will a preferred shareholder owning 100 shares receive in 2021 if Sunshine pays $1,000,000 in dividends

Answer 1

the amount of dividend that would be paid to the preferred shareholder is $2,100

Step-by-step explanation:

The computation of the amount of dividend that would be paid to the preferred shareholder is shown below;

= Par value × dividend rate × number of shares × number of years

= $100 × 7% × 100 × 3 years

= $2,100

hence, the amount of dividend that would be paid to the preferred shareholder is $2,100

The same is to be relevant