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A company has the following Stock Information: Preferred stock, 6.5%, $50 par value, 100,000 shares authorized,...

A company has the following Stock Information:
Preferred stock, 6.5%, $50 par value, 100,000 shares authorized,
20,000 shares issued and outstanding        1,000,000
Common Stock, $9 par value, 300,000 shares authorized,   
175,000 shares issued and outstanding        1,980,000
The board of directors declared a cash dividend in the amount of $80,000. (round to the nearest 2 decimal places)
a How much will the Preferred Stockholders receive in total?
b How much will the Common Stockholders receive in total?
c How much per share will the Common Stockholders receive?
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Answer #1

a:No.of Preference shares issued = 20000 shares

6.5% Preferred Share Capital = 20000 shares*$50=$ 10,00000

Preference Dividend = $ 10,00000*6.5%

= $65000

So Total preferece shareholders will receive $ 65000.

b)Dividend on Common Stock = Total Dividend declared - Dividend on Common stock

=$ 80000-$ 65000

= $ 15000

So Common Stockholders receive $ 15000 in total

c)Dividend perCommon stock =Total Dividend Distributed to Common Stock Holders/total com shares

No .of Common Stock shares = 175000 shares

Dividend per share = $ 15000/175000 shares

= $ 0.09

So Stockholders receive $ 0.09 per share.

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