35. McBean Company has outstanding 14 million shares of $1 par value common stoc

Question

35. McBean Company has outstanding 14 million shares of $1 par value common stock and 1.4 million shares of $3 par value preferred stock. The preferred stock has a 6% dividend rate. The company declares $8,400,000 in total dividends for the year. Preferred Dividends in arrears are $420,000. a. Compute the amount of dividends to be distributed to preferred shareholders. (Enter your answer in dollars and not in millions.) Preferred Dividend b. Compute the amount of dividends to be distributed to common shareholders. (Enter your answer in dollars and not in millions.) Common Dividend

Explanation / Answer

a) Amount of preferred Dividend = (1400000*3*6%)+420000 = 672000

b) Common Dividend = (8400000-672000) = 7728000

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