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Dividend Issue and Outstanding Shares

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The balance sheet caption for common stock is:

Common stock, $10 par value, 7,000,000 shares authorized, 5,700,000 shares issued, 5,500,000 shares outstanding.

(1.) Calculate the dollar amount that will be presented opposite of this caption.
(2.) Calculate total amount of a cash dividend of $1.00 per share.
(3.) What accounts for the difference between issued shares and outstanding shares?

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Solution Summary

The solution explains how to calculate the amount of dividend and the difference between issued and outstanding shares.

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(1.) Calculate the dollar amount that will be presented opposite of this caption.

The dollar amount would be the number of shares issued X par value = 5,700,000X10=$57 million. Once the shares are issued, the cash is received by the firm and ...

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