Ace Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock? a. $50 per shareb. $50,000 in totalc. $5,000 in totald. $0.50 per share

Question

Business

Shamar Wilcox

14 July, 20:06

Ace Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock? a. $50 per shareb. $50,000 in totalc. $5,000 in totald. $0.50 per share

+3

Answers (1)

Know the Answer?

Julie Perez · Answer 1

b. $50,000 in total

Explanation:

Preference shareholders: The preference shareholders are that shareholders who receive the divided before equity shareholders

The computation of the annual dividend is shown below:

= Number of shares * price per share * rate

= 10,000 shares * $100 * 5%

= $50,000

The annual dividend for preference shareholders will be computed by applying the number of shares, the price per share, and the rate.