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 11 months ago

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