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ID: 3137291 • Letter: S
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s 11 Take Test: Test, M id-.109877937, 1&step-null; ? O ? ?https/learn.vc Completion This test can be saved and resumed later only in accordance with your instructors test policy QUESTION 1 The board of directors of Smaltime Business, Inc. has authorized $292,000 to be distibuted to its common stockholders as an annual dividend. If you own 100 of the 8,000 share common stock which are outstanding, how much of a dividend will you receive? O a $36 50 O b $29 20 O C $1,460 00 O d $3 650 00 UESTION 2 The board of directors has authorized $292,000 to be distributed to its stockholders as an annual dividend Your own 100 of the 8,000 shares of common much of a dividend wily ure ene? g ho oo shares of 6% S100 per preferredstockoutstand thereare also o a $6.00 O b $12,000 O C $3.500Explanation / Answer
Q1. The dividend of $ 292000 is payable on common stock of 8000. Hence, on common stock of 100 shares, the dividend to be received is (100/8000)*292000 = $ 3650. Option d. is the correct answer.
Q 2. The dividend receivable on 2000 shares of 6 % $ 100 preferred stock is 2000*100 *6/100 = $ 12000. The balance amount of $ 292000-$12000 = $ 280000 is to be distributed among the common stock holders. Thus, on common stock of 100 shares, the dividend to be received is (100/8000)*280000 = $3500. Option c. is the correct answer.
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