Chicago Company reported the following information at the end of the current yea

Question

Chicago Company reported the following information at the end of the current year: Common stock ( $5 par value; 38,000 shares outstanding) Preferred stock, 15% ( $15 par value; 8.300 shares outstanding) Retained earnings $190,000 124,500 282,500 The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared during the previous two years. Three independent cases are assumed: Case A: The preferred stock is noncumulative; the total amount of dividends is $32,500. Case B: The preferred stock is cumulative; the total amount of dividends is $56,025. Case C: The preferred stock is cumulative; the total amount of all dividends is $90,300 Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. (Round "Dividends per Share" to 2 decimal places.) Dividends Dividends per Share Preferred Common Preferred Common Total Case A Case B Case C

Explanation / Answer

Dividend distribution :

Dividends Per share Per share Preferred Common Total Preferred Common Case A 18675 13825 32500 2.25 0.36 Case B 56025 0 56025 6.75 0 Case C 56025 34275 90300 6.75 0.90

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