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 ( $8 par value; 35,000 shares outstanding) Preferred stock, 10% ( $15 par value:8,000 shares outstanding) Retained earnings $280,000 120,000 281,000 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 $31,000. Case B: The preferred stock is cumulative; the total amount of dividends is $36,000 Case C: The preferred stock is cumulative; the total amount of all dividends is $90,000 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 per Share Total Preferred Common Dividends Case A Case B Case C Preferred Common $12,00019,000 $ 31,000$ 1.50$ 0.54 $ 36,000 s $ 36,000 $4.50$1.54

Explanation / Answer

Dividend distribution :

Dividend Dividend per share Preferred Common Total Preferred Common Case A 12000 19000 31000 0.10 0.54 Case B 12000*3 = 36000 0 36000 0.30 0 Case C 36000 54000 90000 0.30 1.54

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