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    Calculating Dividends

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    See attached for the proper table.

    The shareholders' equity of Kramer Industries includes the data shown below. During 2012, cash dividends of $150 million where declared. Dividends were not declared in 2010 or 2011.

    $ in millions
    Common Stock $200
    Paid-in capital excess of par, common 800
    Preferred stock, 10%, nonparticipating 100
    Paid-in-capital excess of par, preferred 270

    Determine the amount of dividends payable to preferred shareholders and to common shareholders under each of the following two assumptions regarding the characteristics of the preferred stock.

    Assumption A - The preferred stock is noncumulative
    Assumption B - The preferred stock is cumulative

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    The shareholders' equity of Kramer Industries includes the data shown below. During 2012, cash dividends of $150 million where declared. Dividends were not declared in 2010 or 2011

    $ in millions
    Common ...

    Solution Summary

    See attached for the proper table.

    The shareholders' equity of Kramer Industries includes the data shown below. During 2012, cash dividends of $150 million where declared. Dividends were not declared in 2010 or 2011.

    $ in millions
    Common Stock $200
    Paid-in capital excess of par, common 800
    Preferred stock, 10%, nonparticipating 100
    Paid-in-capital excess of par, preferred 270

    Determine the amount of dividends payable to preferred shareholders and to common shareholders under each of the following two assumptions regarding the characteristics of the preferred stock.

    Assumption A - The preferred stock is noncumulative
    Assumption B - The preferred stock is cumulative

    $2.19