Question:
DEN Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2003. What is the annual dividend on the preferred stock?
a.$60 per share
b.$6,000 in total
c.$600 in total
d.$0.60 per share
Answer:
Den Inc OWNES 1000 shares or is the company issuing the shares? If you assume the shares are outstanding and the dividend is paid once per year, the dividend is .06 x the issue price (100) times the shares outstanding.
b. - $6K in total
1,000 shares X $100 par value X .06 = $6,000
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