A corporation's outstanding stock is composed of 20,000 shares of $5 preferred and 100,000 shares of common $25 par. At the end of its first year of operations, a total of $100,000 in dividends is to be distributed. the total amount of the dividends paid on the common stock is $ also need to know the amount on preferred stock as well

Question

A corporation's outstanding stock is composed of 20,000 shares of $5 preferred and 100,000 shares of common $25 par. At the end of its first year of operations, a total of $100,000 in dividends is to be distributed. the total amount of the dividends paid on the common stock is $   also need to know the amount on preferred stock as well

gw2011 · Answer

If the $5 preferred refers to the amount of dividends to be paid for the preferred, then the preferred will get dividends of $100,000 (20,000 shares times $5) and the common stock will get no dividends.

sweta · Answer

hey $5 seems to be par value. Preference dividend rate  (coupon rate) need to be mention