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Common stock dividends are $8,000 and common stock of $83,000 has a $10 par value. What is the dividends per share on common stock (to two decimals)?
A$1.04
B$9.64
C$0.10
D$0.96
Answer & Solution
Correct answer: D. $0.96
1. Shares outstanding = common stock / par = $83,000 / $10 = 8,300 shares.
2. Dividends per share = common dividends / shares = $8,000 / 8,300.
3. = $0.96.
4. Trap: $9.64 (option B) divides by 830 shares, misplacing a decimal in the share count.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §7.3.4 "Dividends Per Share on Common Stock", p.311_
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