York’s outstanding stock consists of 85,000 shares of noncumulative 7.0% preferr

Question

York’s outstanding stock consists of 85,000 shares of noncumulative 7.0% preferred stock with a $5 par value and also 260,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
  

Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)

2015 total cash dividends $ 19,100 2016 total cash dividends 27,700 2017 total cash dividends 230,000 2018 total cash dividends 380,000

Explanation / Answer

Calculation of total dividend paid to each class of shares each year Year Total Dividend Paid to Preferred stockholders Paid to Common stockholders 2015 $19,100.00 $19,100.00 $0.00 2016 $27,700.00 $27,700.00 $0.00 2017 $230,000.00 $29,750.00 $200,250.00 2018 $380,000.00 $29,750.00 $350,250.00 Calculation of dividend per share Year Dividend per Preferred share (85000 outstanding shares) Dividend per Common share [260000 outstanding shares] 2015 $0.225 $0.000 2016 $0.326 $0.000 2017 $0.350 $0.770 2018 $0.350 $1.347 Working Preferred dividend payable per year = [85000 shares * $5] * 7% = $29,750 As the preferred shares are non cumulative , the company is not liable to pay unpaid dividend to preferred stockholders.

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

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