Dividends and Dividend Preferences Video Lessons

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Problem: G Company has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. G Company also has $600,000 of common stock outstanding. During its first year, the company paid cash dividends of $30,000. This dividend should be distributed as follows: a. $12,000 preferred; $18,000 common. b. $30,000 preferred; $0 common. c. $6,000 preferred; $24,000 common. d. $15,000 preferred; $15,000 common.

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Problem Details

G Company has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. G Company also has $600,000 of common stock outstanding. During its first year, the company paid cash dividends of $30,000. This dividend should be distributed as follows:

a. $12,000 preferred; $18,000 common.

b. $30,000 preferred; $0 common.

c. $6,000 preferred; $24,000 common.

d. $15,000 preferred; $15,000 common.

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