A Corporation Has 15,000 Shares of 10%, $50 Par Cumulative

question 54

Multiple Choice

A corporation has 15,000 shares of 10%, $50 par cumulative preferred stock outstanding and 25,000 shares of no-par common stock outstanding. Dividends of $37,500 are in arrears. At the end of the current year, the corporation declares a dividend of $120,000.
What is the dividend per share for preferred shares and for common shares?

• A) The dividend per share is $.50 to preferred shares and $4.60 to common shares.
• B) The dividend per share is $8.00 to preferred shares and $0 to common shares.
• C) The dividend per share is $7.50 to preferred shares and $.30 to common shares.
• D) None of the above are correct.

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