Texas Inc. has 12,000 shares of 6%, $125 par value cumulative preferred stock and 92,000 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock? a.$0.01 per share b.$5,520 in total c.$60.00 per share d.$90,000 in tota

Texas Inc. has 12,000 shares of 6%, $125 par value cumulative preferred stock and 92,000 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock? a.$0.01 per share b.$5,520 in total c.$60.00 per share d.$90,000 in tota

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Texas Inc. has 12,000 shares of 6%, $125 par value cumulative preferred stock and 92,000 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock?

a.$0.01 per share

b.$5,520 in total

c.$60.00 per share

d.$90,000 in total

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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