The stockholders\' equity section of Sundberg Corporation\'s balance sheet at De

Question

The stockholders' equity section of Sundberg Corporation's balance sheet at December 31 is presented here.

SUNDBERG CORPORATION
Balance Sheet (partial)
Stockholder's equity
Paid-in capital
Preferred stock, cumulative, 11,667 shares authorized,
7,000 shares issued and outstanding $725,200
Common stock, no par, 783,375 shares authorized,
626,700 shares issued

2,820,150
Total paid-in capital 3,545,350
Retained earnings

1,182,290
Total paid-in capital and retained earnings 4,727,640
Less: Treasury stock (8,150 common shares)

(32,600)
Total stockholder's equity

$4,695,040

From a review of the stockholders' equity section, answer the following questions.


If the annual dividend on preferred stock is $38,800, what is the dividend rate on preferred stock?

Explanation / Answer

38,800/725,200=.0535 or 5.35%

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