A corperation has 19 000 shares of 19%, 350 par cumulaive peeforred stock oursta

Question

A corperation has 19 000 shares of 19%, 350 par cumulaive peeforred stock ourstanding and 38.000 shares of n-par common stock ouslanding Dhvidends of $37,000 are in arears Al the end of the cuent ye, the corporation declares a dividend of $232,000 How is the dividend allocated between prefemed and common stockholders s and no dividend is paild to common stockholders O A. The dividend is allocated $232000 to preferme O B. The dividend is allocated $14.500 to preferred stockholders and $217 500 to comon stackholders O C. The dividend is allocated $217.500 to preferred stockholders and $14,500 to common stackholders O D. The diidend is allocated $180 500 to prefered stockholders and $51,500 to common stockholders

Explanation / Answer

C. The dividend is allocated $217,500 to preferred stockholders and $14,500 to common stock holders.

amount to be paid to common stock holders = total amount paid - total amount to be paid to preferred stock holders.

=>$232,000 - $217,500

=>$14,500.

dividend to preferred stockholders =>19,000 * $50 *19% $180,500 add:arrears of preferred dividend $37,000 total amount to be paid to preferred stock holders $217,500

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