Ex-Act Corporation pays dividends at the end of each year. The dividends that it

Question

Ex-Act Corporation pays dividends at the end of each year. The dividends that it paid for 2012, 2013, and 2014 were $160,000, $120,000, and $360,000, respectively.

Calculate the total amount of dividends Ex-Act paid in each of these years to its common and preferred stockholders under the following capital structure: 40,000 shares of $100 par, 6 percent noncumulative preferred stock and 120,000 shares of $10 par common stock. Ex-Act had no dividends in arrears at the beginning of 2012. If an amount is zero, enter "0".

Calculate the total amount of dividends Ex-Act paid in each of these years to its common and preferred stockholders under the following capital structure: 20,000 shares of $100 par, 7 percent cumulative preferred stock and 120,000 shares of $10 par common stock. Ex-Act had no dividends in arrears at the beginning of 2012. If an amount is zero, enter "0".

Explanation / Answer

1.under the following capital structure: 40,000 shares of $100 par, 6 percent noncumulative preferred stock and 120,000 shares of $10 par common stock.

Dividend to preferred shareholders

(40000×100×.06)=240000

2. under the following capital structure: 20,000 shares of $100 par, 7 percent cumulative preferred stock and 120,000 shares of $10 par common stock.

Dividend to cumulative preferred stockholders

20000×100×.07=140000

140000

120000

160000

(140000+20000)

2012 2013 2014 Dividend paid 160000 120000 360000

Dividend to preferred shareholders

(40000×100×.06)=240000

160000 120000 240000 Dividend to common stockholders 0 0 120000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.