Occidental Produce Company Has 40,000 Shares of Common Stock Outstanding

question 69

Multiple Choice

Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% noncumulative, with $100 par value. On October 15, 2015, the company declares a total dividend payment of $40,000. How much dividend will be paid to the preferred shareholders?

• A)$40,000
• B)$2,000
• C)$8,000
• D)$4,500

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Definitions:

Debt Capital

Financing acquired through borrowing that must be repaid at a later date, typically with interest.

Private Placements

A means of raising capital through the sale of securities to a relatively small number of select investors rather than through a public offering.

Corporate Debt Issues

refer to the financial obligations or borrowings taken on by companies, typically through the issuance of bonds, loans, or commercial paper.

Corporate Equity Issues

The process by which companies issue shares of stock to raise equity capital.