From its inception through the year of 2016, Quicksales, Inc. was profitable and
ID: 2581505 • Letter: F
Question
From its inception through the year of 2016, Quicksales, Inc. was profitable and made strong dividend payments each year. In the year 2017, Quicksales had major losses and paid no dividends. In 2018, the company started making large profits again, and they were able to pay dividends to all shareholders long dash —both common and preferred. There are 2 comma 400 2,400 shares of cumulative, 13 13% preferred stock outstanding. The preferred stock has a par value of $ 100 $100. What is the total amount of dividends that should be paid to the preferred stockholders in December, 2018? A. $ 93 comma 600 $93,600 B. $ 87 $87 C. $ 62 comma 400 $62,400 D. $ 31 comma 200 $31,200 need a breakdown please
Explanation / Answer
Dividend payable to preferred stock holders in december 2018 is $62,400
Explanation:
Preferred stock is cumulative stock , so dividend has not paid in 2017 will be paid in 2018 along with the 2018 dividend
2017 dividend = 2400 shares *100 par value *13/100
= $ 31,200
2018 dividend = 2400 shares *100 par value *13/100
= $ 31,200
Total dividend = $ 31,200 + $ 31,200
= $ 62,400
Answer is option (c) $ 62 comma 400
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