5. Anderson Company paid dividends at the end of each year as follows: 2012 $ 18
ID: 2426768 • Letter: 5
Question
5. Anderson Company paid dividends at the end of each year as follows: 2012 $ 180,000 2013 $ 260,000 2014 $ 600,000 Determine the amount of dividends per share paid on common and preferred stock for each year assuming independent capital structures as follows: A) Common: 300,000 shares of no- par common Preferred: 10,000 shares of $100 par, 9% noncumulative preferred B) Common: 250,000 shares of no-par common Preferred: 20,000 shares of $100 par 9% noncumulative preferred C) Common: 250,000 shares of no-par common Preferred: 20,000 shares of $100 par 9% cumulative preferred D) Common: 250,000 shares of $1 par common Preferred: 30,000 shares of $100 par 9% cumulative preferred 2012 2013 2014 A) Preferred Stock Common Stock B) Preferred Stock Common Stock C) Preferred Stock Common Stock D) Preferred Stock Common Stock 5. Anderson Company paid dividends at the end of each year as follows: 2012 $ 180,000 2013 $ 260,000 2014 $ 600,000 Determine the amount of dividends per share paid on common and preferred stock for each year assuming independent capital structures as follows: A) Common: 300,000 shares of no- par common Preferred: 10,000 shares of $100 par, 9% noncumulative preferred B) Common: 250,000 shares of no-par common Preferred: 20,000 shares of $100 par 9% noncumulative preferred C) Common: 250,000 shares of no-par common Preferred: 20,000 shares of $100 par 9% cumulative preferred D) Common: 250,000 shares of $1 par common Preferred: 30,000 shares of $100 par 9% cumulative preferred 2012 2013 2014 A) Preferred Stock Common Stock B) Preferred Stock Common Stock C) Preferred Stock Common Stock D) Preferred Stock Common StockExplanation / Answer
Calculation of amount of dividends per share paid on common and preferred stock for each year:
2,012
2,013
2,014
Total Dividend Paid
$ 180,000
$ 260,000
$ 600,000
A)
Preferred Stock
$ 90,000
$ 90,000
$ 90,000
(10000*100*9%)
(10000*100*9%)
(10000*100*9%)
Common Stock
$ 90,000
$ 170,000
$ 510,000
(180000-90000)
(260000-90000)
(600000-90000)
B)
Preferred Stock
$ 180,000
$ 180,000
$ 180,000
(20000*100*9%)
(20000*100*9%)
(20000*100*9%)
Common Stock
$ -
$ 80,000
$ 420,000
(180000-180000)
(260000-180000)
(600000-180000)
C)
Preferred Stock
$ 180,000
$ 180,000
$ 180,000
(20000*100*9%)
(20000*100*9%)
(20000*100*9%)
Common Stock
$ -
$ 80,000
$ 420,000
(180000-180000)
(260000-180000)
(600000-180000)
D)
Preferred Stock
$ 180,000
$ 260,000
$ 190,000
(30000*100*9%) = 270000, but paid 180000, hence Cumulative = 90000
(180000+90000) = 270000, but paid 260000, hence cumulative = 10000
(180000+10000)
Common Stock
$ -
$ -
$ 410,000
(180000-180000)
(260000-260000)
(600000-190000)
Calculation of amount of dividends per share paid on common and preferred stock for each year:
2,012
2,013
2,014
Total Dividend Paid
$ 180,000
$ 260,000
$ 600,000
A)
Preferred Stock
$ 90,000
$ 90,000
$ 90,000
(10000*100*9%)
(10000*100*9%)
(10000*100*9%)
Common Stock
$ 90,000
$ 170,000
$ 510,000
(180000-90000)
(260000-90000)
(600000-90000)
B)
Preferred Stock
$ 180,000
$ 180,000
$ 180,000
(20000*100*9%)
(20000*100*9%)
(20000*100*9%)
Common Stock
$ -
$ 80,000
$ 420,000
(180000-180000)
(260000-180000)
(600000-180000)
C)
Preferred Stock
$ 180,000
$ 180,000
$ 180,000
(20000*100*9%)
(20000*100*9%)
(20000*100*9%)
Common Stock
$ -
$ 80,000
$ 420,000
(180000-180000)
(260000-180000)
(600000-180000)
D)
Preferred Stock
$ 180,000
$ 260,000
$ 190,000
(30000*100*9%) = 270000, but paid 180000, hence Cumulative = 90000
(180000+90000) = 270000, but paid 260000, hence cumulative = 10000
(180000+10000)
Common Stock
$ -
$ -
$ 410,000
(180000-180000)
(260000-260000)
(600000-190000)
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