Keener Corporation has 15000 shares of 10 50 par noncumulati

Keener Corporation has 15,000 shares of 10%, $50 par, noncumulative preferred stock outstanding and 25,000 shares of no-par common stock outstanding. At the end of 20X5, Keener Corporation declares a dividend of $150,000. No dividends were declared by Keener Corporation in 20X4.

What is the dividend per share to preferred and common?

A. $2.50 to preferred, $5.00 to common

B. $5.00 to preferred, $3.00 to common

C. $6.00 to preferred, $1.80 to common

D. $10.00 to preferred, $.00 to common.

(thank you!)

Solution

Dividend per share to preferred = 50*10% = $5 Dividend per share to common= (150000-15000*5)/25000 = $3 Option B is correct