Question

The AES Corporation has $ 6,593,000 to distribute its dividends and did not distribute dividends the...

The AES Corporation has $ 6,593,000 to distribute its dividends and did not distribute dividends the previous year. There are 96,000 shares of cumulative preferred stock that earn dividends at​ $0.68 per share and 200,000 shares of common stock. How much money goes to preferred​ stockholders?

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Answer #1

Preferred Stock:

Number of shares = 96,000
Dividend per share = $0.68

Annual Dividend = Number of shares * Dividend per share
Annual Dividend = 96,000 * $0.68
Annual Dividend = $65,280

Company did not distribute any dividend during the previous year. Therefore, the company will distribute dividend to preferred stock for the current year and previous year.

Dividend paid to Preferred Stockholders = $65,280 + $65,280
Dividend paid to Preferred Stockholders = $130,560

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