Business: Torino Company has 1,500 shares of $10 par value, 7.0% cumulative and nonparticipating preferred stock and 15,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 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:. a. $1,600. b. $550. c. $1,050. d. $2,100. e. $500.

C. Declaration of Independence....

Torino Company has 1,500 shares of $10 par value, - id150010713567520, joshuag9047

kie1148

30.06.2021

a. $1,600.

Explanation:

The computation of the amount of the dividend that should be paid to the preference shareholder in the second year is shown below:

Annual dividend is

= 1,500 shares × 7% × $10

= $1,050

Now the dividend that should be paid to the next year

= $1,050 + $1,050 - $500

= $1,600

Hence, the mount of the dividend that should be paid to the preference shareholder in the second year is $1,600

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