Question

Pug Corporation has 11,000 shares of $10 par common stock outstanding and 21,000 shares of $100 par, 5% noncumulative, nonparticipating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $165,000 dividend will be paid. What are the dividends per share for preferred and common, respectively

Answer 1

the dividends per share for preferred and common is $5 and $5.45 respectively

Step-by-step explanation:

The computation of the dividend per share for both stocks is as follows:

For preference one

= 5% of $100

= $5

And, for common one

= ($165,000 - (21,000 × 100 × 5%)) ÷ (11,000 shares)

= $5.45

hence, the dividends per share for preferred and common is $5 and $5.45 respectively