1. If two years’ preferred dividends are in arrears and the board of directors d

Question

1. If two years’ preferred dividends are in arrears and the board of directors declares cash dividends of $21,600, what total amount will be paid to the preferred and to the common shareholders?

a. total amount paid to the preferred shareholders =
b. Total amount paid to the common sshareholders=

Required information The following information applies to the questions displayed below] Raphael Corporation's common stock is currently selling on a stock exchange at $197 per share, and its current balance sheet shows the following stockholders' equity section Preferred stock-5% cumulative, $ -par value, 1,000 shares s 70,ee0 authorized, issued, and outstanding Common stock- value, 4,eee shares authorized, issued and outstanding Retained earnings Total stockholders' equity 160,000 370,000 $600,000 5.1 If two years' preferred dividends are in arrears and the board of directors declares cash dividends of $21,600, what total amount will be paid to the preferred and to the common shareholders? Total amount naid to the preferred shareholders

Explanation / Answer

Preferred dividend = (70000*5%*3) =10500

Common dividend = (21600-10500) = 11100

Dividend per share for common dividend = (11100/4000) = 2.78 per share

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