The shareholders\' equity of Kramer Industries includes the data shown below. Du

Question

The shareholders' equity of Kramer Industries includes the data shown below. During 2017, cash dividends of $240 million were declared. Dividends were not declared in 2015 or 2016. ($ in millions) $ 300 Common stock Paid-in capital-excess of par, commorn Preferred stock, 8%, nonparticipating Paid-in capital-excess of par, preferred 900 150 AK Required: Determine the amount of dividends payable to preferred shareholders and to common shareholders under each of the following two assumptions regarding the characteristics of the preferred stock. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Assumption A The preferred stock is noncumulative. Assumption B-The preferred stock is cumulative. ($ in millions) Preferred Common Assumption A Assumption B

Explanation / Answer

dividends to preferred shareholders 12 preferred Common Assumption A 12 228 Assumpton B 36 204 under assumption B arrear of two year 12*2=24 will also be paid

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