ABC issued 12,000 shares and subsequently reacquired 2,000 shares as treasury stock. The following year, ABC Corporation declared a regular dividend of $2 per share. What would be the total amount of the dividend expense

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Business

Ricky Barnett

8 May, 05:53

ABC issued 12,000 shares and subsequently reacquired 2,000 shares as treasury stock. The following year, ABC Corporation declared a regular dividend of $2 per share. What would be the total amount of the dividend expense

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Fernando Cruz · Answer 1

Dividend expense will be $20000

Explanation:

We have given share used = 12000 shares

And Treasury stock = 2000 shares

It is given a regular dividend of $2 per share

We have to find the dividend stock

Outstanding share = Share used - treasury stock = 12000 - 2000 = 10000 shares

So dividend expense = $2*10000 = $20000

So dividend expense will be $20000