Question

Weaver Corporation had the following stock issued and outstanding at January 1, Year 1: 99,000 shares of $14 par common stock. 8,000 shares of $80 par, 4 percent, noncumulative preferred stock. On June 10, Weaver Corporation declared the annual cash dividend on its 8,000 shares of preferred stock and a $4 per share dividend for the common shareholders. The dividends will be paid on July 1 to the shareholders of record on June 20. Required a. Determine the total amount of dividends to be paid to the preferred shareholders and common shareholders.

Answer 1

Total dividends is $421,600.00

Step-by-step explanation:

Preferred shareholders' dividend=preferred shares value*4%

preferred shares value=8000*$80

=$640,000

Preferred shareholders' dividend=$ 640,000.00*4%

=$25,600.00

Common shareholders' dividend =number of shares*dividend per share

number of shares is 99,000

dividend per share is $4

Common shareholders' dividend =99000*$4

=$396,000.00

Total dividends=Common shareholders' dividend+Preferred shareholders' dividend

Total dividends=$25,600.00 +$ 396,000.00

=$ 421,600.00