Palmer Corporation issued and has outstanding 20000 shares of $10 par-value comm
ID: 2369835 • Letter: P
Question
Palmer Corporation issued and has outstanding 20000 shares of $10 par-value common stock and 1000 shares of $60 par-value 20 percent preferred stock. THe board of directors votes to distribute $2000 as dividentds in 2010, $3000 in 2011 and $53000 in 2012.
Compute the total divident and the divident for each share paid to preferred stockholders and common stockholders each year under the following assumed situations.
Case A: the preferred stock is nonparticipating and noncumulative
case B: the preferred stock is cummulative and nonparticipating
Explanation / Answer
Including OWNES 1000 shares or is the company issuing the shares? If you assume the shares are outstanding and the dividend is paid once per year, the dividend is .06 x the issue price (100) times the shares outstanding.
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