A company's board of directors votes to declare a cash dividend of $.80 per share of common stock. The company has 16,000 shares authorized, 11,000 issued, and 10,500 shares outstanding. The total amount of the cash dividend is:

a. $11,800.

b. $12,800.

c. $8,400.

d. $17,200.

e. $8,800.

c. $8,400

Explanation:

Given that

cash dividend = $.80 per share

Authorized Shares = 16,000

Issued Shares = 11,000

Outstanding Shares = 10,500

So, the dividend amount is shown below

= Outstanding Number of shares * dividend per share

= 10,500 shares * $0.80 per share

= $8,400

The cash dividend amount should always be calculated on outstanding number of shares.