Question

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reaquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared? (Points: 2)
1. $80,0002. $10,0003. $90,0004. $100,000

Answer 1

Answer:

amount of cash dividend paid = $80000

so correct option is 1. $80,000

Explanation:

given data

common stock = 100,000 shares

shares issued = 45,000

subsequently reaquired = 5,000

dividend= $2 per share

to find out

What is the amount of cash dividends

solution

first we get here no of share outstanding that is

no of share outstanding = shares issued - subsequently reaquired    .........1

no of share outstanding = 45000 - 5000

no of share outstanding = 40000 shares

and

now we get amount of cash dividend paid here as

amount of cash dividend paid = outstanding share × dividend share   ...........2

amount of cash dividend paid = 40000 × $2

amount of cash dividend paid = $80000

so correct option is 1. $80,000