# Common stock issue price/preferred dividend

E 8.6 Common stock-calculate issue price and dividend amount
The balance sheet for common stock is the following:

Common stock without par value, 2,000,000 shares authorized,
400,000 shares issued, and 360,000 shares outstanding - \$2,600,000

Required:

a. Calculate the average price at which the shares were issued.
b. If these shares had been assigned at stated value of \$1 each, show how the caption here would be different.
c. If a cash dividend of \$0.60 per share were declared, calculate the total amount of cash that would be paid to stockholders.
d. What accounts for the difference between issued shares and outstanding shares?

E 8.8 Preferred stock-calculate dividend amounts. Calculate the cash dividends required to be paid for each of the following preferred stock issues:

Required:

a. The semiannual dividend on 6% cumulative preferred, \$50 par value, 30,000 shares authorized, issued, and outstanding.
b. The annual dividend on \$3.60 cumulative preferred, 400,000 shares authorized, 180,000 shares issued, 148,200 outstanding. Last year's dividend has not been paid.
c. The quarterly dividend on 7.5% cumulative preferred, \$100 stated value, \$103 liquidating value, 120,000 shares authorized, 112,000 shares issued and outstanding. No dividends are in arrears.

#### Solution Summary

The solution explains how to calculate the average issue price of common stock and the cash dividend to be paid on preferred stock.