Smith Jones Market Company: Preferred/Common Stock Valuation
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Smith Jones Market Company has 3,000 shares 9%, $60.00 par cumulative preferred stock outstanding and 4,900 shares of $3.75 par value common stock outstanding. The company began operations on April 1, 2010. The cash dividends declared and paid during each of the first 3 years of Smith Jones marketing operations are shown. Calculate the amounts that went to the preferred and the common shareholders (SHs) each year.
Year Total Dividends Dividends to Dividends to
Ended Paid Preferred SHs Common SHs
March 31, 2010 $10,000
March 31, 2011 $36,000
March 31, 2012 $40,000
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Solution Summary
The attached MS Excel spreadsheet contains detailed instructions for the calculation of the value of preferred and common shares from relevant financial information of the Smith Jones Market Company.
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