Question

# 1a. Happy Corporation has issued 575,000 shares of common stock and 100,000 shares of cumulative preferred...

1a. Happy Corporation has issued 575,000 shares of common stock and 100,000 shares of cumulative preferred stock. Annual dividends on the cumulative preferred stock are \$4 per share. Last year, dividends of \$2.50 per share were paid to preferred stockholders. This year the company has \$1,990,000 net income and the Board of Directors decide to distribute 60% of net income as dividends. If you own 300 shares of common stock in Happy Corporation, what will the total amount of your annual dividend be? Round your final answer to the nearest dollar.

\$336

\$750

\$414

\$783

1b.

You buy 200 shares of stock at a price of 38.50 and incur brokerage fees totaling \$130. Calculate your total cost.

 \$7,830 \$7,570 \$7,731 \$33,700

1a) Statement showing Dividend per share

 Particulars Amount Net profit during the year 1990000 Amount to be distributed as dividend(1990000*60%) 1194000 Fixed dividend to preference share holders(100000*4) 400000 Balance to be distributed amoung equity share holders 794000 Total no of equity shares 575000 Dividend per share 1.38

If one hold 300 shares, then he will get 300*1.38 = 414\$

ans 414\$

1b)

Statement showing total cost

 Particulars Amount Purchase of stock(200*38.5) 7700 Brokerage 130 Total cost 7830

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