Question 29 Wildhorse Corp. had $100,000 of 7%. S20 par value preferred stock an
ID: 2337058 • Letter: Q
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Question 29 Wildhorse Corp. had $100,000 of 7%. S20 par value preferred stock and 12,000 shares of $25 par value common stock outstanding throughout 2017. | Your answer is incorrect. Try again. Assuming that total dividends declared in 2017 were $64,000, and that the preferred stock is not cumulative but is fully participating, common stockholders should receive 2017 dividends of what amount? Common stockholders should receive 21 INK TO TEXE Your answer is incorrect. Try again Assuming that total dividends declared in 2017 were $64,000, and that the preferred stock is fully participating and cumulative with preferred dividends in arrears for 2016, preferred stockholders should receive 2017 dividends totaling what amount? Preferred stockholders should receiveExplanation / Answer
1) Amount of Dividend of the Common Stock :-
Current Year Dividend = Preferred Stock Percent * Value of Preferred Stock
= 7% * $100000
= $7000
Current Year Dividend = Common Stock Percent * Value of Common Stock
= 7% * $300000
= $21000
Amount Available for Participation = Dividend Declared - Current Year Total Dividend
= $64000 - $28000
= $36000
Par Value of stock that is to participate = Preferred Stock + Common Stock
= $100000 + $300000
= $400000
Rate of Participation = Amount Participation / Par Value of Stock
= $36000 / $400000
= 9%
Participating Dividend = Rate of Perticipation * Preferred Stock
= 9% * $100000
= $9000
Participating Dividend = Rate of Participation * Common Stock
= 9% * $300000
= $27000
2) Amount of Dividend of Preferred Stock :-
3) Amount of Dividend of Common Stockholders :-
Current Year Dividend = Common Stock Percent * Value of Common Stock
= 7% * $300000
= $21000
Particulars Preferred Stock Common Stock Total Current Year's Dividend 7% $7000 $21000 $28000 Participating Dividend 9% $9000 $27000 $36000 Total $16000 $48000 $64000Related Questions
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