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    Determining dividend of cumulative preferred stock

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    Koon Corporation has the following stock outstanding:
    6% Preferred, $100 Par $1,200,000
    Common Stock, $50 Par 2,000,000

    No dividends were paid the previous 2 years. If Koon declares $400,000 of dividends in the current year, how much will preferred stockholders receive if the preferred stock is cumulative?

    © BrainMass Inc. brainmass.com October 9, 2019, 9:53 pm ad1c9bdddf
    https://brainmass.com/business/accounting-for-corporations/determining-dividend-cumulative-preferred-stock-200683

    Solution Preview

    Since over the two years, No dividend is paid to cumulative preferred shares, they will get 12% dividend ...

    Solution Summary

    Solution describes the steps in determining payouts to preferred shareholders based upon given information.

    $2.19