Atlantis Corporation has 10 comma 000 shares of 12 %, $ 84.00 par noncumulative preferred stock outstanding and 20 comma 000 shares of nominus par common stock outstanding. At the end of the current year, the corporation declares a dividend of $ 194 comma 000. How is the dividend allocated between preferred and common stockholders?

Question

Vasquez

Business

26 March, 19:27

Atlantis Corporation has 10 comma 000 shares of 12 %, $ 84.00 par noncumulative preferred stock outstanding and 20 comma 000 shares of nominus par common stock outstanding. At the end of the current year, the corporation declares a dividend of $ 194 comma 000. How is the dividend allocated between preferred and common stockholders?

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Answers (1)

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Kathleen Barber · Answer 1

The dividend allocated between preferred and common shareholders is:-The dividend is allocated $100800 to preferred shareholders & $93200to common shareholders.

Explanation:-

Total dividend declared = $194000

Dividend to preferred shareholders = ($10,000 shares*$84per share) * 12%

=$100800

Dividend to common shareholders = Total dividend declared - Dividend to preferred shareholders

=$194000-$100800

=$93200