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Calculating annual dividends, total dividends and common stock

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PGroup Project Journey #2:

Qamar, Inc., did not pay dividends in 2012 or 2013, even though 41,700 shares of its 6.4%, $70 par value cumulative preferred stock were outstanding during those years. The company has 240,000 shares of $2 par value common stock outstanding.

a. Calculate the annual dividend per share obligation on the preferred stock. (Round your answer to 2 decimal places.)

Annual dividend per share =

b. Calculate the amount that would be received by an investor who has owned 170 shares of preferred stock and 260 shares of common stock since 2011 if a $0.35 per share dividend on the common stock is paid at the end of 2014. (Round your answer to the nearest whole dollar.)

Total dividends received =

Assume that you own 170 shares of $14 par value common stock of a company and the company has a 2-for-1 stock split when the market price per share is $42.

a. How many shares of common stock will you own after the stock split?

Shares of common stock =

b. What will probably happen to the market price per share of the stock?

The market price per share should remain same.

The market price per share should be half of what it was.

The market price per share should be double.

c. What will probably happen to the par value per share of the stock?

The par value per share will decrease.

The par value per share will remain same.

The par value per share will increase.

Please explain how you got your answer.

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Solution Summary

The solution details the questions asked, including how to calculate annual dividends, total dividends and common stock per share.

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Radhika Lakshmi, MPhil
Education
  • MPhil, Madurai Kamaraj University
  • MCom, Annamalai University
  • IATA, International Air Transport Association
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