Zale Corporation has outstanding 120,000 shares of 10 percent, $80 par-value cumulative preferred stock and 300,000...

Zale Corporation has outstanding 120,000 shares of 10 percent, $80 par-value cumulative preferred stock and 300,000 shares of no-par-value common stock.

1.1	During 2016, the corporation paid dividends of $720,000. What amount will be paid on each share of preferred stock? (Round your answer to 2 decimal places.)

1.2	During 2016, the corporation paid dividends of $720,000. What amount will be paid on each share of common stock?

2.1	During 2017, the corporation distributed dividends of $1,410,000. What amount will be paid on each share of preferred stock? (Round your answer to 2 decimal places.)

2.2	During 2017, the corporation distributed dividends of $1,410,000. What amount will be paid on each share of common stock? (Round "Common stock per share value" to 2 decimal places.)

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	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
*Annual Preferred Dividend:*	$ 80	10.00%	$ 8.000	120,000	$ 960,000.00

Requirement 1.1
Total dividend = $ 720000
Dividend payable to Preferred stock = $ 960000
Dividend paid to Preferred Stock = $ 720,000 [leaving $ 240000 in arrear]

Dividend per share of preferred stock = $ 720000 / 120000 shares = $ 6.00
Requirement 1.2
Total Common Stock dividend = Total Dividend – Preferred dividend
= $ 720000 – 720000 = $ 0
Common Stock dividend per share = $ 0
Requirement 2.1
Total Dividend = $ 1410000

Dividend for Preferred Stock = $ 960000 (for current year) + $ 240000 for arrear = $ 1200000
Dividend per share of preferred stock = $ 1200000 / 120000 shares = $ 10

Requirement 2.2
Common Stock dividend = $ 1410000 – 1200000 = $ 210,000

Common Stock dividend per share = $ 210000 / 300000 shares
= $ 0.70

ekkarill92 answered 1 year ago

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