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16 March, 11:29

A company's board of directors votes to declare a cash dividend of $.80 per share of common stock. The company has 16,000 shares authorized, 11,000 issued, and 10,500 shares outstanding. The total amount of the cash dividend is:

a. $11,800.

b. $12,800.

c. $8,400.

d. $17,200.

e. $8,800.

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Answers (1)
  1. 16 March, 13:04
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    c. $8,400

    Explanation:

    Given that

    cash dividend = $.80 per share

    Authorized Shares = 16,000

    Issued Shares = 11,000

    Outstanding Shares = 10,500

    So, the dividend amount is shown below

    = Outstanding Number of shares * dividend per share

    = 10,500 shares * $0.80 per share

    = $8,400

    The cash dividend amount should always be calculated on outstanding number of shares.
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