ABC company has 10,000 authorized 12% preference share capital, 5,000 of it is issued and outstanding, it has market value of 110 pesos, and par value of 100 pesos. If the company declares dividends, how much dividend should it pay for the preference shares?

ABC company has 10,000 authorized 12% preference share capital, 5,000 of it is issued and outstanding, it has market value of 110 pesos, and par value of 100 pesos. If the company declares dividends, how much dividend should it pay for the preference shares?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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