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25 October, 21:38

Texas Inc. has 10,000 shares of 6%, $125 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock?

a).75 per share

b) 10,000 in total

c) $75 per share

d) $75,000 in total

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Answers (1)
  1. 25 October, 21:56
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    d) $75,000 in total

    Explanation:

    The computation of the annual dividend on the preferred stock is shown below:

    = Number of shares * par value per share * dividend percentage

    = 10,000 shares * $125 * 6%

    = $75,000

    We simply multiplied the number of shares with the oar value and the dividend percentage so that the accurate amount can be calculated

    All other information which is given is not relevant. Hence, ignored it
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