This Question: 1 pt 3af 1000 complete) ? This Quiz: 10 Preferred dividends In ea

Question

This Question: 1 pt 3af 1000 complete) ? This Quiz: 10 Preferred dividends In each case in the following table, EE. how many dolars of prefemed dividends per share must be paid to preferred stockholders betore common stock dividends are pad me amount of preferred dvideds that must be padr, Case A before common dvidends are pad ?0und to the nearest cent ) The amount of pretened dvidends hat must be padr, case B betore common avonds ?. paid.{ Rand to me nearest cent ) The amount of predeed avidends nat mast be pad in Case C betore common vinds are pald is lound to he nearest cent)c on the kon located on the toe-rght com tbtlow n drder to coy Theanundprt med den ends that must be pad n case Dbetre co mon d-"pad«O (Rordtone nearest cent , The anount of preferred dividends that must be pad m Case E betore common av are Hound to the cearstt)e Data Table e' content, nto . spreads Par vaue share 550 C Noncumulative D Cumulative 31 35 20% $100 Print Done

Explanation / Answer

Cumulative Preferred Shares: For cumulative preferred shares if the dividend is not paid in earlier year than the arrears of dividend will be accumulated till the dividend is not paid to preferred shares holders. Noncumulative Preferred Shares: In type of shares if the dividend is not paid in any earlier year than that dividend will be gone it means only current year dividend will be paid. Remarks Case A : Answer = Dividend per shares = $ 7.80 per common shares There is no outstanding so no cumulation Case B : Dividend per shares = $50 X 4% = $       2.00 There is outstanding of old dividend but no payment is made Case C : Answer = Dividend per shares = $ 1.35 per common shares There is outstanding of old dividend but no payment is made Case D: Dividend Per shares = $ 100 X 2 % = $       2.00 Arreas : Dividend Passes 4 years X $ 2.00 = $    10.00 Total $    12.00 Case E: Dividend Per shares = $ 110 X 6.5 % = $       7.15 Arreas : Dividend Passes 6 years X $ 7.15 = $    42.90 Total $    50.05

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