Tanner Corporation declared a $3 million dividend in 2020. The following share capital was outstanding: 4,000,000 common shares; 50,000 cumulative preferred shares with an $8 dividend amount. No dividend was declared in 2019. How much will be distributed per share to the preferred shareholders and common shareholders, respectively?
Multiple Choice
$16 and $0.55
$8 and $0.65
$8 and $0.55
$16 and $0.65
The annual dividend of the preferred shares, if declared, amounts to $100,000. Dividends of $80,000 are declared during year 1 and dividends of $300,000 are declared during year 2. Assuming the preferred shares have a current dividend preference, how much will be paid to common shareholders in year 2?
Multiple Choice
$0
$180,000
$20,000
$200,000
Which of the following statements about stock options is false?
Multiple Choice
Stock options were developed to motivate executives to achieve goals important to the shareholders.
The cost of stock options is recorded as compensation expense by the issuing company.
The majority of publicly-traded companies have instituted a stock option plan.
Employees will likely exercise the stock option even if the exercise price is greater than the market price of the shares.