Question

Ennis, Inc. has 35,000 common shares issued at a $2.25 par value of which 22,000 are outstanding. If Ennis has no other outstanding stock, what size dividend must be paid such that each share receives $3.20

Answer 1

$70,400

Step-by-step explanation:

The company has:

Number of Shares = 35,000

Par value = $2.25

Outstanding = 22,000

The question requires that we find the size of dividend that must be paid if each share receives $3.20:

Only Outstanding shares are included in dividends contribution.

So to pay 22,000 shares at $3.20

= 22,000 x $3.20

= $70,400