Question

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 44,000 shares were originally issued and 4,800 were subsequently reacquired. What is the amount of cash dividends to be paid if a $1-per-share dividend is declared

Answer 1

The amount of cash dividend is $39200

Step-by-step explanation:

Before calculating the amount of cash dividends, it is imperative to compute the balance of issued and outstanding shares.

The issued and outstanding shares comprises of the initially issued shares of 44,000 shares, adjusted for the new issue and share repurchased.

shares issued and outstanding=44,000-0-4,800=39200

The amount of cash dividends=39200 *$1=$39200