Question

A company's board of directors' votes to declare a total cash dividend of $15,000. The company has 2,500 shares of $1 par common stock and 400 shares of 5%, $200 par preferred stock outstanding. What is the total amount that will be paid to preferred shareholders

Answer 1

$4,000

Step-by-step explanation:

The computation of the total amount that will be paid to preferred shareholders is shown below:

= Number of preference shares × dividend rate × par value

= 400 shares × 5% × $200

= $4,000

We simply applied the above formula so that the total amount of dividend paid to preference shareholders could come

And the same is to be considered