WPI Inc Has the Following Current Equity Accounts on Its Balance

question 77

Multiple Choice

WPI Inc. has the following current equity accounts on its balance sheet: $\begin{array}{ll}\text { Common stock }(\$ 2.50 \text { par, } 500,000 \text { shares) } & \$ 1,250,000 \\\text { Contributed capital in excess of par } & \$ 10,000,000 \\\text { Retained earnings } & \$ 15,540,000\\\text { Total }&\$26,790,000\end{array}$ ? If WPI earned $3.20 per share this year, what is the maximum dividend per share that WPI may pay if the state capital impairment provisions are limited to the par value and the contributed capital in excess of par accounts?

• A) $3.20
• B) $31.08
• C) $34.28
• D) $15.54

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