Calculate the cash dividends required to be paid for each of the following prefe
ID: 2346993 • Letter: C
Question
Calculate the cash dividends required to be paid for each of the following preferred stock issues:Required:
(a)
The semiannual dividend on 6% cumulative preferred, $50 par value, 30,000 shares authorized, issued, and outstanding.(Omit the "$" sign in your response.)
Semi-annual dividend $
(b)
The annual dividend on $3.60 cumulative preferred, 400,000 shares authorized, 180,000 shares issued, 148,200 shares outstanding. Last year's dividend has not been paid.(Omit the "$" sign in your response.)
Cumulative dividend $
(c)
The quarterly dividend on 7.5% cumulative preferred, $100 stated value, $103 liquidating value, 120,000 shares authorized, 112,000 shares issued and outstanding. No dividends are in arrears. (Omit the "$" sign in your response.)
Quarterly dividend $
Explanation / Answer
a.
Annual dividend = Dividend rate * par value * number of shares outstanding
= 6% * $50 * 30,000 = $90,000
Semiannual dividend = annual dividend / 2 = $90/000 / 2 = $45,000
b.
Annual dividend = Dividend rate * number of shares outstanding
= $3.60 * 148,200 = $533,520
Arrears of $533,520 are owed for last year as well, so the total dividends owed would be:
$533,520 * 2 years = $1,067,040
c.
Annual dividend = Dividend rate * stated value * number of shares outstanding
= 7.5% * $100 * 112,000 = $840,000
Quarterly dividend = annual dividend / 4 = $840,000 /4 = $210,000
a.
Annual dividend = Dividend rate * par value * number of shares outstanding
= 6% * $50 * 30,000 = $90,000
Semiannual dividend = annual dividend / 2 = $90/000 / 2 = $45,000
b.
Annual dividend = Dividend rate * number of shares outstanding
= $3.60 * 148,200 = $533,520
Arrears of $533,520 are owed for last year as well, so the total dividends owed would be:
$533,520 * 2 years = $1,067,040
c.
Annual dividend = Dividend rate * stated value * number of shares outstanding
= 7.5% * $100 * 112,000 = $840,000
Quarterly dividend = annual dividend / 4 = $840,000 /4 = $210,000
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