Question Help A corporation has 50000 shares of 12 preferred

Question Help A corporation has 50,000 shares of 12% preferred stock outstanding. Also, there are 50,000 shares of common stock outstanding. Par value for each is $100. If a $900,000 dividend is paid, what is the amount of dividends per share on common stock? O A. $12.00 O B. $6.00 OC. $3.00 D. $18.00 O E. None of these

Solution

B. $6.00

Preferred dividends = 50,000 * $100 * 12% = $600,000

Common stock dividends = $900,000 - $600,000 = $300,000

Dividend per share on common stock = $300,000 / 50,000 = $6.00