Answer:
Dividend paid to Common Stockholders = $25000
so correct option is a. $25,000
Explanation:
given data
shares outstanding = 5,000
Par value = $100
Dividend Rate = 4%
common stock outstanding = 20,000 shares
par value = $1
dividend = $45,000
to find out
What is the amount of dividends received by the common stockholders in 2018
solution
first we get here Value of Preferred Stock that is express as
Value of Preferred Stock = Number of shares outstanding × Par value ....................1
put here value we get
Value of Preferred Stock is = 5,000 × $100
Value of Preferred Stock is = $500,000
and
Annual Dividend will be here
Annual Dividend = Value of Preferred Stock × Dividend Rate .........................2
put here value we get
Annual Dividend = $500,000 × 4%
Annual Dividend = $20,000
and
so as for 2017 Dividend paid is here as
Dividend paid to Preferred Stockholders = for 2016 + for 2017
Dividend paid to Preferred Stockholders = $20,000 + $20,000 = $40000
so Dividend paid to Common Stockholders = $45000- $40000 = $5000
and
for 2018 Dividend paid is here as
Dividend paid to Preferred Stockholders is = $20,000 for the 2018
so
Dividend paid to Common Stockholders will be = $45000 - $20000
Dividend paid to Common Stockholders = $25000
so correct option is a. $25,000
