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A customer holds 100 shares of ABC Corp $100 par convertible preferred stock convertible at a 10 to 1 ratio. If ABC declares and pays a 10% stock dividend, then as of the payable date, the customer will now have:_______.A. 90 shares of ABC preferred stockB. 100 shares of ABC preferred stockC. 100 shares of ABC preferred stock and 10 shares of ABC common stockD. 110 shares of ABC preferred stock

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eooyibo123

Answer:

B. 100 shares of ABC preferred stock

Explanation:

Shares are ownership stakes of a company that are given out to individuals who contribute to capital base of a company.

Preference shares are those whose owners recieve preference in payment of dividends, a fixed dividend is paid to them.

Ordinary shares recieve less preference when dividend is paid, usually coming last in divedend payment.

In this scenario ABC has decided to pay 10% stock dividend. This will be paid to ordinary share holders.

So the person with 100 preference shares will have 100 preference shares

10% of par value of $100 is 0.1 * 100= $10

Number of shares are 100 so the value is now 100 * $10 = $1,000

Since the conversion rate of preference to ordinary shares is 10:1

Number of preference shares= 1,000 ÷ 10= 100 preference shares

machara

Answer:

is C

Explanation:

CADB

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