Dividends on preferred and common stock
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If you have $800,000 of 8% preferred stock and $1,200,000 of common stock outstanding, each having a par value of $10 per share, and no dividends have been paid or declared during 2009 and 2010. Then as of December 31, 2011, it is desired to distribute $488,000 in dividends, how how much will the preferred and common stockholders receive under each of the following assumptions:
(a) The preferred is noncumulative and nonparticipating.
(b) The preferred is cumulative and nonparticipating.
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(a) The preferred stock is non cumulative and non participating and so would get only the fixed dividends for 2011. Dividends per year on preferred stock ...
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