Question

torino company has 1,600 shares of $50 par value, 7.5% cumulative preferred stock and 16,000 shares of $10 par value common stock outstanding. the company paid total cash dividends of $5,000 in its first year of operation. the cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Answer 1

Prior to any dividend being paid to shareholders of common stock, preferred stockholders must receive a cash dividend of $4,900.

We have given that,

Torino company has 1,600 shares of = $50 per value

The cumulative preferred stock of = 7.5%

They also have 16,000 shares

Common stock outstanding = $10 per value

Total dividends = $5,000

Now,

The first year amount of dividend that was paid in the first year of working is  stated as follows:

7.5% * 1,600 * 50 = $6000

The paid dividend = $5,000

The amount payable during the second year to the common stakeholders is

=$3900 + 1000 = $4,900

Preferred shares are cumulative, for this, the amount paid to the stakeholders was $4,900

To learn more about cash dividends, visit the link below:

brainly.com/question/16270517

#SPJ4