Sheffield Corp. has 3,500 shares of 9%, $101 par value preferred stock outstandi

Question

Sheffield Corp. has 3,500 shares of 9%, $101 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $124,500 cash dividend.

Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios.

Sheffield Corp. has 3,500 shares of 9%, 101 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $124,500 cash dividend Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios. 1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years The dividend paid to preferred stockholders s The dividend paid to common stockholders 2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years The dividend paid to preferred stockholders s The dividend paid to common stockholders s 3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years The dividend paid to preferred stockholders s The dividend paid to common stockholders $

Explanation / Answer

Annual preferred dividends = 3500*101*9%= 31815 1 Dividend paid to preferred stockholders 31815 Dividend paid to common stockholders 92685 =124500-31815 2 Dividend paid to preferred stockholders 31815 Dividend paid to common stockholders 92685 3 Dividend paid to preferred stockholders 95445 =31815*3 Dividend paid to common stockholders 29055 =124500-95445

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