The expected dividend per share of common stock is:
A) $1.80.
B) $2.10.
C) $2.70.
D) $3.90.

Question

Quizplus · Accepted Answer

The expected dividend per share is calculated by adding the dividends paid on preferred stock ($1.20 per share) to the earnings per share ($4.80 per share) minus the amount retained by the company ($4.20 per share). Therefore, the expected dividend per share of common stock is $2.10 per share ($1.20 + $4.80 - $4.20 = $1.80 + $0.30 = $2.10).

The Expected Dividend Per Share of Common Stock Is