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Yorks outstanding stock consist of 80,000 shares of non-cumulative 7.5% preferred stock with a $6 par...

Yorks outstanding stock consist of 80,000 shares of non-cumulative 7.5% preferred stock with a $6 par value and also 20,000 shares of common stock with a par value.

2013 40,000

2014 28,000

2015 200,000

2016 350,000

Determine the amount of dividends paid each year to each of the class of stockholders: preferred and common. Also compute the total dividends paid each class of stock for the four years combined. The same question above - expect the 80,000 shares are cumulative.

Solutions

Expert Solution

When Non Cumulative :

Par Value per Preferred share Dividend Rate Dividend per preferred share Number of preferred shares Preferred Dividend
Annual Preferred Dividend $6 7.50% $0.45 $80,000 $36,000
Total Cash dividend Paid Paid to Preferred Paid to common Dividend in arrears at year-end
2015 $40,000 $36,000 $0 $0
2016 $28,000 $28,000 $0 $0
2017 200000 $36,000 $164,000 $0
2018 350000 $36,000 $314,000 $0
Totals $618,000 $136,000 $478,000 $0

When Cumulative:

Par Value per Preferred share Dividend Rate Dividend per preferred share Number of preferred shares Preferred Dividend
Annual Preferred Dividend $6 7.50% $0.45 $80,000 $36,000
Total Cash dividend Paid Paid to Preferred Paid to common Dividend in arrears at year-end
2015 $40,000 $36,000 $0 $0
2016 $28,000 $28,000 $0 $8,000
2017 200000 $44,000 $156,000 $0
2018 350000 $36,000 $314,000 $0
Totals $618,000 $144,000 $470,000 $8,000

ekkarill92 answered 1 year ago
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