Calculate the annual cash dividends required to be paid for each of the followin

Question

Calculate the annual cash dividends required to be paid for each of the following preferred stock issuances: a. $2.50 cumulative preferred, no par value; 700,000 shares authorized, 570,000 shares issued, 30,000 shares held as treasury stock. b. 7 percent, $50 par value preferred; 300,000 shares authorized, 224,000 shares issued and outstanding. c. 7.5 percent cumulative preferred, $50 stated value, $52 liquidating value; 240,000 shares authorized, 192,000 shares issued, 128,000 shares outstanding.

Explanation / Answer

a Shares issued              570,000 Dividend per share                     2.50 Dividend 1,425,000 b Shares issued                224,000 Dividend per share (a) 7% Par value per share                           50 Value of preferred stock (b)          11,200,000 Dividend (a*b)                784,000 c Shares issued                192,000 Dividend per share (a) 7.5% Par value per share                           52 Value of preferred stock (b)            9,984,000 Dividend (a*b)                748,800

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