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# What were the dividends on common stock in 2007?

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Kimm, Inc. had net income for 2007 of \$2,120,000 and earnings per share on common stock of \$5. Included in the net income was \$300,000 of bond interest expense related to its long-term debt. The income tax rate for 2007 was 30%. Dividends on preferred stock were \$400,000. The payout ratio on common stock was 25%. What were the dividends on common stock in 2007?

\$430,000.

\$482,500.

\$645,000.

\$530,000.

#### Solution Preview

Kimm, Inc. had net income for 2007 of \$2,120,000 and earnings per share on common stock of \$5. Included in the net income was \$300,000 of bond interest expense related to its long-term debt. The income tax rate for 2007 was 30%. Dividends on ...

#### Solution Summary

Calculates the value of the dividends on common stock.

\$2.19

## Common and Preferred Dividends

See attached file.
Preferred Stock Dividends
Based on the following information, illustrate the distribution of both
common and preferred stock dividends based on these two scenerios:
(1) Preferred stock is 7% and non-cummulative.
(2) Preferred Stock is 8% and cummulative.
(This will result in a total of 6 allocations, 2 for each of the 3 years.)
(3) Journalize the declaration of cash dividend for 2009 under part (2).
Shares of Preferred Stock
2,000
Par Value PS
\$50
Shares of Common Stock
100,000
Par Value of CS
\$10
Dividends 2007
\$6,000
Dividends 2008
\$12,000
Dividends 2009vidends 2009
28000,

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