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    Norman's Cabinet, Inc. Equity dividends

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    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.

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    https://brainmass.com/business/accounting-for-corporations/415560

    Solution Preview

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

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