Answer:
$126,000
Explanation:
Given:
Total outstanding stocks = 600,000
Price per share of common stock = $2
Number of preferred stock = 120,000
Interest rate = 8%
Stock Value = $5
Outstanding year = 3
Total Amount of preferred stock = Principle × Rate × Time
or
Total Amount of preferred stock = ( 120,000 × $5 ) × 0.08 × 3 = $144,000
Since,
The preferred stock value is more than the amount distributed
Hence,
the total amount distributed i.e $126,000 will be received by the preferred stockholders
2
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-Zayn Malik 1795
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That would be known as taxable income