York’s outstanding stock consists of 65,000 shares of noncumulative 7.0% preferr

Question

York’s outstanding stock consists of 65,000 shares of noncumulative 7.0% preferred stock with a $5 par value and also 110,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:

2015 total cash dividends $ 11,500 2016 total cash dividends 20,700 2017 total cash dividends 260,000 2018 total cash dividends 410,000 Exercise 11-9 Dividends on common and cumulative preferred stock LO C2 Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.) Number of Preferred Shares Par Value per Dividend per Preferred Dividend Preferred Dividend Rate Preferred Share Share Annual Preferred Dividend Paid to Preferred Paid to Common Dividends in Arrears at ear-end Total Cash 2015 2016 2017 2018 Totals Dividend Paid 11,500 20,700 260,000 410,000 $702,200 $ Prev 8 of 8 Next

Explanation / Answer

Par Value per Preferred Share Dividend Rate Dividend per Preferred Share Number of Preferred Shares Preferred Dividend Annual Preferred Dividend: 5 7.00% 0.35 65,000 22750 Total Cash Dividend Paid Paid to Preferred Paid to Common Dividends in Arrears at year-end 2015 11500 11500 0 2016 20,700 20,700 0 2017 2,60,000 22,750 2,37,250 2018 4,10,000 22,750 3,87,250 Total: 702200 77700 624500

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