?Mall, Inc., has 4000 shares of 1?%, $ 20 par cumulative preferred stock and 500

Question

?Mall, Inc., has 4000 shares of 1?%, $ 20 par cumulative preferred stock and 50000 shares of $ 1 par common stock outstanding. At the beginning of the current? year, preferred dividends were four years in arrears. Willow Run?'s board of directors wants to pay a $ 1.10 cash dividend on each share of outstanding common stock in the current year. To accomplish? this, what total amount of dividends must Willow Run ?declare?

Willow Run Mall Inc., has 4,000 shares of 1%, $20 par cumulative preferred stock and 50,000 shares of 51 par common stock outstancing. A the beginning of the current year, preferred dividends were four years in arrears. Willow Run's board of directors wants to pay a $1.10 cash dividend on each share ot outstanding common stock in the current year. To accomplish this, what total amount of dlvidends must Willow Run declare? O A. 555.000 ? B. S58.200 O C. S59,000 O D. Some other amount

Explanation / Answer

Preferred stock dividends = 4,000 shares * 20 per share * 1% = 800

Preferred share dividends in arrears 800 * 4 = 3,200

Total preferred share dividends payable = Current year dividends + Dividends in arrears

= 3,200 + 800 = 4,000

Common stock dividends = 50,000 shares * 1.1 per share

= 55,000

Total amount of dividends muat Willow Run declare = 4,000 + 55,000 = 59,000

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