Calculate the cash dividends required to be paid for each of the following prefe

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

Preferred dividends can either be in percentage amounts or per share amounts. Both are used here. a.) Make the % rate semiannual by dividing it by 2. Formula: Semiannual dividend = Semiannual % x Par value x Shares issued b.) Formula: Per share dividend amount x Shares issued Since these are cumulative and two years have accumulated, double the amount yielded from the formula above. c.) Make the % rate quarterly by dividing it by 4. Formula: Quarterly dividend = Quarterly % x Stated value x Shares issued "No dividends in arrears" means that no unpaid cumulative dividends have accumulated.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.