Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 45

For the following questions, circle the best response.

The annual per share dividend requirement of an 8%, $150 par value preferred stock that was issued for $160 is

a. $8.00.

b. $12.00.

c. $12.80.

d. $15.00.

e. $16.00.

Step 1 of 7

Preferred stock:

Preferred stock dividends are dividends that are required to be paid to preferred shareholders on a regular basis. In order to calculate preferred stock dividends, multiply the par value (not the issue value) of the preferred stock by the annual per share dividend requirement.