Question

Texas Inc. has 8,000 shares of 6%, $125 par value cumulative preferred stock and 83,000 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock

Answer 1

Answer:

the annual dividend on the preferred stock is $60,000

Explanation:

The computation of the annual dividend on the preferred stock is shown below:

= Number of shares × par value per share × dividend percentage

= 8,000 shares × $125 × 6%

= $60,000

Hence, the annual dividend on the preferred stock is $60,000

We simply applied the above formula and the same is relevant