Saturn Corporation Has 10,000 Shares of 10%, $75 Par Noncumulative

question 22

Multiple Choice

Saturn Corporation has 10,000 shares of 10%, $75 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $180,000. How is the dividend allocated between preferred and common stockholders?

• A)The dividend is allocated $5,000 to preferred shareholders and $115,000 to common shareholders.
• B)The dividend is allocated $75,000 to preferred shareholders and $105,000 to common shareholders.
• C)The dividend is allocated $60,000 to preferred shareholders and $120,000 to common shareholders.
• D)The dividend is allocated $72,000 to preferred shareholders and $108,000 to common shareholders.

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Definitions:

Outgroup Homogeneity

The tendency to perceive members of a group to which one does not belong as more similar to one another than members of one's ingroup.

Stereotypic Ways

Referring to behaviors or thoughts that are overly simplified and generalized about a group of people, based on common stereotypes.

Stereotypes

Oversimplified generalizations about a group of people that ignore individual diversity.

Prejudices

Preconceived negative judgments or feelings towards individuals based on their membership in a certain group without factual justification.