Share
Explore BrainMass

# Norman's Cabinet, Inc. Equity dividends

1. Norman's Cabinet, Inc., had net income of \$424,800 for its fiscal year ended October 31, 2009. During the year, the company had outstanding 53,000 shares of 9 percent \$60 par value preferred stock, and 18,480 shares of common stock.

2 The balance sheet caption for common stock is:

Common stock, no par value, 7,000,000 shares authorized, 4,600,000 shares issues 4,450,000 shares outstanding \$552,000,000

(a.) Calculate the average price at which the shares were issued.
(b.) If these shares had been assigned a stated value of \$10 each, show how the above caption would be different.
(c.) Calculate the total amount of cash that would be paid to stockholders if a cash dividend of \$1.50 per share were declared.

#### Solution Preview

A) Dividend pay to preferred stockholder = 53000 share x \$60 x9%=\$286,200
Dividend distribute to common stock holder = ...

#### Solution Summary

Comments and computations give you help in solving these. Calculations are shown for you or are in Excel (click in cells to see computations).

\$2.19