Question

Solaris, Inc. has 2000 shares of 5%, $10 par value, cumulative preferred stock and 50000 shares of $1 par value common stock outstanding at December 31, 2020. What is the annual dividend on the preferred stock

Answer 1

The annual dividend on the preferred stock is $1000 in total.

What is an Annual dividend?

• An annual dividend is a payment made by an insurance firm to its policyholders each year in the insurance sector. Annual dividends are most frequently given out in combination with plans that provide long-term disability insurance and permanent life insurance.
• A payment made annually to an insurance policyholder, frequently under a long-term disability or permanent life insurance policy, is known as an annual dividend.
• The insurance company's income, the success of investments, and the amount of money invested all affect the dividend amount.

Annual profits may be paid as cash, used to pay for further insurance, or added to premiums to lower future total payments.

The company has 2000 shares of 5% that is: (2000*5)/100 = 100

with a par value of $10, which becomes:

100*$10 = $1000.

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