Declared semiannual dividends of $1.20 on 75,000 shares of preferred stock and $0.08 on the 600,000 shares of $20 par common stock to stockholders of record on March 31, payable on April 30.
Split common stock 4 to 1 and reduced PAR from $80 to $20. After the split there were 600,000 shares.
To calculate the total dividend payment for each type of stock, you need to multiply the dividend per share by the number of shares.
1. For the preferred stock:
- Dividend per share: $1.20
- Number of shares: 75,000
- Total dividend payment for preferred stock: $1.20 x 75,000 = $90,000
2. For the common stock:
- Dividend per share: $0.08
- Number of shares: 600,000
- Total dividend payment for common stock: $0.08 x 600,000 = $48,000
Therefore, the company will pay a total of $90,000 to the preferred stockholders and $48,000 to the common stockholders as dividends.