Ozark Distributing Company is primarily engaged in the wholesale distribution of
ID: 2473255 • Letter: O
Question
Ozark Distributing Company is primarily engaged in the wholesale distribution of consumer products in the Ozark Mountain regions. The following disclosure note appeared in the company’s 2016 annual report: Note 5. Convertible Preferred Stock (in part): The Company has the following Convertible Preferred Stock outstanding as of September 2016
The Preferred Stock is convertible at any time by the holders into a number of shares of Ozark’s common stock equal to the number of preferred shares being converted times a fraction equal to $20 divided by the conversion price. The conversion prices for the Preferred Stock are subject to customary adjustments in the event of stock splits, stock dividends and certain other distributions on the Common Stock. Cumulative dividends for the Preferred Stock are payable in arrears, when, as and if declared by the Board of Directors, on March 31, June 30, September 30, and December 31 of each year.
The Preferred Stock is optionally redeemable by the Company beginning on various dates, as listed above, at redemption prices equal to 110% of the liquidation preference. The redemption prices decrease 1% annually thereafter until the redemption price equals the liquidation preference after which date it remains the liquidation preference.
What amount of dividends is paid annually to a preferred shareholder owning 200 shares of the Series A preferred stock? (Round "Dividend Rate" to 3 decimal places.)
If dividends are not paid in 2017 and 2018, but are paid in 2019, what amount of dividends will the shareholder receive? (Round your answer to 3 decimal places.)
If the investor chooses to convert the shares in 2017, how many shares of common stock will the investor receive for his/her 200 shares? (Round your answers to 2 decimal places.)
If Ozark chooses to redeem the shares on June 18, 2017, what amount will the investor be paid for his/her 200 shares? (Round "Per Share Amounts" to 2 decimal places except percentage values.)
* I would like to get an answer from the expert the answer is corrected. Please provide with explained and calculated.
Thanks!
Date of issuance June 17 2013 Optinally redeemable beginning June 18, 2015 Par value (gross proceeds) $2,200,000 Number of shares 110,000 Liquidation preference per share $20 Conversion price per share $24.22 Number of common shares in which to be converted 90,834 Dividend rate 6.675%Explanation / Answer
1) Summarizing above data , we conclude as
2) Since cumulative dividend is applicable on these shares , If shareholder receives dividend in 2019, then he will receive arrears of last 2 years also. So, his dividend earning will be 267 x 3, = $ 801
Par Value Dividend rate Total Annual Number of Dividend per Shares Owned Annual Preferred Preferred Shares Preferred Dividend Preferred Shares Preferred Shares Dividend 200 shares 2200000 6.675% 146850 110000 1.335 200 267.00Related Questions
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