Question

Corporation has 10 comma 000 shares of 5​%, $ 15 par cumulative preferred stock and 45 comma 000 shares of common stock outstanding. Diazlo declared no dividends in 2017 and had no dividends in arrears prior to 2017. In 2018​, Diazlo declares a total dividend of $ 54 comma 000. How much of the dividends go to the common​ stockholders?

Answer 1

Answer:

$39,000

Explanation:

For determining of dividend available first we need to compute the preferred dividend which is shown below:-

Preferred dividend = Number of shares × Shares percentage × par  value

= 10,000 × 5% × $15

= $7,500

Dividends available = Dividend + Preferred dividend in 2017 - Preferred dividend in 2018

= $54,000 - $7,500 - $7,500

= $39,000