Question

Organic​ Produce, Inc. has 43 comma 000 shares of common stock outstanding and 5 comma 000 shares of preferred stock outstanding. The common stock is $ 0.02 par​ value; the preferred stock is 7​% noncumulative with a $ 100.00 par value. On October​ 15, 2019, the company declares a total dividend payment of $ 47 comma 000. How much dividend will be paid to the preferred​ stockholders?

Answer 1

Answer:

$49,000

Explanation:

Data provided in the question:

common stock outstanding = 43,000

Preferred stock outstanding = 5,000

Value common stock = $0.02 par​ value

Value preferred stock = 7​% noncumulative with a $ 100.00 par value

Total dividend payment declared = $47,000

Now,

Dividend paid to the preferred​ stockholders will be

= Preferred stock outstanding × Value preferred stock

= 7,000 × $100 × 7%

= 7,000 × $100 × 0.07

= $49,000