1) Truckers, Inc. has 105,000 shares of cumulative preferred stock outstanding.
ID: 2465443 • Letter: 1
Question
1) Truckers, Inc. has 105,000 shares of cumulative preferred stock outstanding. The preferred stock pays dividends in the amount of $3 per share, but because of cash flow problems, the company did not pay any dividends last year. The board of directors plans to pay dividends in the amount of $750,000 this year.
What amount will go to preferred stockholders?
Dividend payment to preferred stockholders: ?
How much will be available for common stock dividends?
Dividend payment to common stockholders: ?
A)What amount will go to preferred stockholders?
Dividend payment to preferred stockholders: ?
Explanation / Answer
A Dividend payment to preferred stockholders =105000*3 =315000 B Dividend payment to common stockholders = 750000-315000= 435000
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