Purchase Solution

Determining dividend of cumulative preferred stock

Not what you're looking for?

Ask Custom Question

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?

Purchase this Solution
Solution Summary

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

Solution Preview

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

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

View More Free Quizzes
Related BrainMass Solutions

  • Preferred Dividends

    71917 Determining the amount of a preferred dividend. Colliers, Inc. has 200,000 shares of cumulative preferred stock outstanding.

  • Dividends: Preferred Stock Holders

    declared or paid 20X7 If the company's preferred stock is NON CUMULATIVE and the 20X8 dividend declared amounts to a total of $20,000, how much will go to PREFERRED stock holders?

  • Calculating Dividends Per Share

    Cumulative dividend implies that arrears of dividend should be paid to holders of preferred stock when common .

  • Common and Preferred Dividends

    Since the stock is non-cumulative, there will be no carry forward of the shortfall. (2) Preferred Stock is 8% and cumulative. If the preferred stock is cumulative, then the dividends in arrears are carried forward.

  • Explanation of preferred stocks

    Company A: Noncumulative, nonparticipating, preferred stock with a $4-per-year dividend rate. Each share of this stock will cost you $20. Company B: Cumulative, nonparticipating, preferred stock with a $4-per-year dividend rate.

  • Aaron Burr Corporation: common stockholders and dividends

    of preference dividend for 2007= -$10000 Amount of common stock dividend= $15000 Common stockholders and dividends for Aaron Burr Corporation are examined.

  • Cumulative & Non-cumulative Preferred dividend effect on EPS

    For the cumulative preferred stock, the arrears of dividend, over the past years, if any, should be paid in full before the equity shareholders can be paid anything.

  • Dividends explained in this answer

    d) Preferred stock is nonparticipating and cumulative. a) Preferred stock is fully participating and cumulative.

  • Computing dividends on preferred and common stock

    So in 20X4 .... 3 years preferred dividend will be paid because these are cumulative preferred stock.

View More Related Solutions