The Shareholders' Equity of Red Corporation Includes $200,000 of $1

question 85

Multiple Choice

The shareholders' equity of Red Corporation includes $200,000 of $1 par common stock and $400,000 par of 6% cumulative preferred stock. The board of directors of Red declared cash dividends of $50,000 in 2018 after paying $20,000 cash dividends in 2017 and $40,000 in 2016. What is the amount of dividends common shareholders will receive in 2018?

• A) $18,000.
• B) $22,000.
• C) $26,000.
• D) $28,000.

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Definitions:

World Price

Goods or services' market rates internationally, steered by the universal dynamics of supply and demand.

Domestic Consumers

Individuals or entities within a country that purchase goods and services.

Domestic Producers

Companies or individuals that produce goods or services within their home country.

Equilibrium Price

The cost at which the volume of goods available equals the volume sought by consumers.