uiz: Chapter 7 s Question: 1 pt 3 of 10 (0 complete) eferred dividends in each c

Question

uiz: Chapter 7 s Question: 1 pt 3 of 10 (0 complete) eferred dividends in each case in the following table, EE how many dollars of e amount of preterred dividends that must be paid in Case A before common dhvidends are paid s s e armount of preferred dividends that must be paid in Case 8 before common dividends are paid is s e amount of preferred dividends that must be paid in Case C before common dividends are paid is e armount of preferred dividends that must be paid in Case D betore common dividends are paid is s e amount of preferred dividends that must be paid in Case E before common dividends are paid is sCaseT preferred dividends per share must be paid to preferred stockholders before common stock dividends are paid? dividends are paid s Data Table (Click on the icon located on the top-right corner of the data table below in order to copy Es contents into a spreadsheet) Dividend per Periodsof o Par value share per period dividends passed $50 $90 $100 $110 7 80 40% $1.35 20% 65% D Cumulative E Cumulative Print Done ter your answer in each of the answer boxes

Explanation / Answer

Cumulative Preferred Shares: For cumulative preferred shares if the dividend is not paid in earlier year than the arrears of dividend will be accumulated till the dividend is not paid to preferred shares holders. Noncumulative Preferred Shares: In type of shares if the dividend is not paid in any earlier year than that dividend will be gone it means only current year dividend will be paid. Remarks Case A : Answer = Dividend per shares = $ 7.80 per common shares There is no outstanding so no cumulation Case B : Dividend per shares = $50 X 4% = $       2.00 There is outstanding of old dividend but no payment is made Case C : Answer = Dividend per shares = $ 1.35 per common shares There is outstanding of old dividend but no payment is made Case D: Dividend Per shares = $ 100 X 2 % = $       2.00 Arreas : Dividend Passes 5 years X $ 2.00 = $    10.00 Total $    12.00 Case E: Dividend Per shares = $ 110 X 6.5 % = $       7.15 Arreas : Dividend Passes 6 years X $ 7.15 = $    42.90 Total $    50.05

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