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    Ghostbuster2's Avatar
    Ghostbuster2 Posts: 1, Reputation: 1
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    #1

    Oct 6, 2012, 02:25 PM
    dividends with preferred stock and common stock
    Griseta Corporation was organized on January 1st, 2011. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2011,$6,000; 2012,$12,000; and 2013, $28,000

    Show the allocations of dividends to each class of stock, assuming the preferred stock dividend is 8% and 1) Not Cumulative and 2) Cumulative

    I already have the answers but I was wondering if you could show me the math that went into this problem so I can understand how the answers come together. Thank You :)
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Oct 6, 2012, 03:09 PM
    cumlative means the dividend ranks ahead of common stock dividends and will carry over from year to year until paid

    so shares on issue multiplied by value = ?

    if you have the answers you can work backwards to get the process
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