the company has 32,000 shares authorized, 27,000 issued, and 26,500 shares outstanding. the total amount of the cash dividend is $42,400 $1.60 × 26,500 shares outstanding = $42,400.
A dividend is a distribution of profits via a corporation to its shareholders. when an agency earns a profit or surplus, it could pay a share of the income as a dividend to shareholders. Any amount now not distributed is taken to be re-invested in the business (called retained profits). The modern-day 12 months' income in addition to the retained income of preceding years is available for distribution; a business enterprise is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (typically a deposit right into a bank account) or, if the company has a dividend reinvestment plan, the amount may be paid by the issue of similar shares or by using percentage repurchase. In some instances, the distribution may be of assets.
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