Marigold Corp., has 14200 shares of 4%, $100 par value, cumulative preferred stock and 59900 shares...

Marigold Corp., has 14200 shares of 4%, $100 par value, cumulative preferred stock and 59900 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2016. The board of directors declares and pays a $117000 dividend in 2017 and in 2018. What is the amount of dividends received by the common stockholders in 2018?

$117000

$63600

$56800

Solutions

Expert Solution

Answer

If the company has declared dividend, then firstly Dividend is to be paid to Cumulative Preference Shares and then to Common Shareholders.

Cummulative Preference shares are those shares whose dividend gets cummulated if not paid i.e. If the company fails to pay dividend to Cummulative Preference shares, then their dividend gets cummulated to next year till that year in which it is paid to the shareholders.

Dividend to Cummulative Preference Shareholder's = (14,200 Shares * $100) * 4%

Dividend to Cummulative Preference Shareholder's = $56,800

Company paid no dividend in 2016 and $117,000 in 2017 and 2018, So company paid $117,000 dividend in 3 years (2016, 2017 and 2018).

So the dividend of 3 years is due to Cummulative shares,

Dividend to Cummulative shares = $56,800 * 3 = $170,400, And Company paid $117,000

So the dividend declared is not sufficient to fully pay Cummulative shares, so how can they pay Common Shareholders.

And we read earlier that we pay after paying Cummulative.

So dividend paid to Common = $0

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Coronado Industries, has 16000 shares of 4%, $100 par value, cumulative preferred stock and 61000 shares...

Coronado Industries, has 16000 shares of 4%, $100 par value, cumulative preferred stock and 61000 shares of $1 par value common stock outstanding at December 31, 2021. There were no dividends declared in 2019. The board of directors declares and pays a $108000 dividend in 2020 and in 2021. What is the amount of dividends received by the common stockholders in 2021? A $0 B $24000 C $108000 D $64000

Anders, Inc., has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 40,000 shares...

Anders, Inc., has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 40,000 shares of $1 par value common stock outstanding on December 31, 2018. There were no dividends declared in 2016. The board of directors declares and pays dividends of $90,000 each in 2017 and in 2018. What is the dividends per share received by the common stockholders in 2018? Group of answer choices $1.00 $1.25 $0.75 $1.75

Anders, Inc., has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 40,000 shares...

Pharoah company has 6500 shares of 5%, $100 par value, cumulative preferred stock and 13000 shares...

Pharoah company has 6500 shares of 5%, $100 par value, cumulative preferred stock and 13000 shares of $1 par value common stock outstanding in december 31,2020. There were no dividends declared in 2018. The board of directors declares and pays a $61100 dividend in 2019 and in 2020. what is the amoun of dividends recieved by the common stock holders in 2020.

Marigold Corp. has 2,700 shares of 8%, $103 par value preferred stock outstanding at December 31,...

Marigold Corp. has 2,700 shares of 8%, $103 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $120,500 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios. 1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years. The dividend paid to preferred stockholders $ The dividend paid to common stockholders $ 2. The preferred stock is...

Oceanic Company has 25,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of...

Oceanic Company has 25,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $30 par common stock. The following amounts were distributed as dividends: Year 1 - $50,000, Year 2 - $12,500, Year 3 - $75,000. Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of...

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Year 1: $10,000 Year 2: 45,000 Year 3: 90,000 Determine the dividends per share for preferred and common stock for the first year

Sandpiper Company has 15,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of...

Sandpiper Company has 15,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends: Year 1 $37,500 Year 2 12,000 Year 3 45,000 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'. Year 1 Year 2 Year 3 Preferred stock (Dividends per share) $ $ $ Common stock (Dividends...

Green Planet Corp. has (a) 5,600 shares of cumulative 11% preferred stock with a $2 par...

Green Planet Corp. has (a) 5,600 shares of cumulative 11% preferred stock with a $2 par value and (b) 19,600 shares of common stock with a $0.01 par value. During its first two years of operation, Green Planet declared and paid the following total cash dividends. Compute the dividends paid each year to each of the two classes of stockholders: preferred and common. Year 1 total cash dividends $ 760 Year 2 total cash dividends $ 1,960 Year 1 Cumulative...

Mendez Corporation has 10,000 shares of its $100 par value, 7 percent cumulative preferred stock outstanding...

Mendez Corporation has 10,000 shares of its $100 par value, 7 percent cumulative preferred stock outstanding and 50,000 shares of its $1 par value common stock outstanding. In Mendez’s first four years of operation, its board of directors paid the following cash dividends: 2011, none; 2012, $120,000; 2013, $140,000; 2014, $140,000. Determine the dividends per share and total cash dividends paid to the preferred and common stockholders during each of the four years.

Subjects