There are 7,500 shares of $10 par value participating 9 percent preferred stock outstanding, and 32,500 shares of common stock o

Question

3 years ago

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There are 7,500 shares of $10 par value participating 9 percent preferred stock outstanding, and 32,500 shares of common stock o

utstanding. The common stock cash dividend is $.50 per share, and total dividends of $50,000 are distributed. Remaining dividends are shared equally between common and preferred stockholders.

Mathematics

1 answer:

astraxan [27] · Answer 1 · 2022-04-15T15:35:54+03:00

<h2>Answer:</h2><h2>Free distributable dividend = $ 27000</h2>

Step-by-step explanation:

There are 7,500 shares of $10 par value participating 9 percent preferred stock outstanding, and 32,500 shares of common stock outstanding. Therefore,

dividend paid to common stockholder =32500(0.50) = $ 16250

Preferred Stock dividend= 7500 (10) (0.09) = $ 6750

considering total dividend paid $ 50000 includes preferred dividend,then free distributable dividend = 50000 - 16250 - 6750 = $ 27000