okiebear48
Apr 25, 2015, 06:52 AM
Common stock (par $1; outstanding, 560,000 shares)
$
560,000
Preferred stock, 9% (par $10; outstanding, 21,600 shares)
216,000
Retained earnings
906,000
On December 31, 2013, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2011 or 2012. Three independent cases are assumed:
Case A:
The preferred stock is noncumulative; the total amount of 2013 dividends would be $36,000.
Case B:
The preferred stock is cumulative; the total amount of 2013 dividends would be $36,000. Dividends were not in arrears prior to 2011.
Case C:
Same as Case B, except the amount is $81,000.
R
Compute the amount of dividends per share payable to each class of stockholders for each case
$
560,000
Preferred stock, 9% (par $10; outstanding, 21,600 shares)
216,000
Retained earnings
906,000
On December 31, 2013, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2011 or 2012. Three independent cases are assumed:
Case A:
The preferred stock is noncumulative; the total amount of 2013 dividends would be $36,000.
Case B:
The preferred stock is cumulative; the total amount of 2013 dividends would be $36,000. Dividends were not in arrears prior to 2011.
Case C:
Same as Case B, except the amount is $81,000.
R
Compute the amount of dividends per share payable to each class of stockholders for each case