The shareholders equity of Kramer Industries includes the data shown below. Duri

Question

The shareholders equity of Kramer Industries includes the data shown below. During 2014, cash dividends of $180 million were declared. Dividends were not declared in 2012 or 2013.

Determine the amount of dividends payable to preferred shareholders and to common shareholders under each of the following two assumptions regarding the characteristics of the preferred stock. (Enter your answers in millions.)

The shareholders equity of Kramer Industries includes the data shown below. During 2014, cash dividends of $180 million were declared. Dividends were not declared in 2012 or 2013.

Explanation / Answer

10% of 190 = 19

$180-19 = 161

Assumption A:

Preferred = 19, Common = 161

Assumption B:

19 x 3 = 57, $180-57 = 123

Preferred = 57, Common = 123

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