JMH has the following stock outstanding:
Preferred, 5%, $100 par value, 2,000 shares
Common, $60 par value, 5,000 shares
Compute the amount of dividends per share payable to each class of stock for each independent case. Show computations.
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Per Share
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Per Share
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Preferred Stock Provisions
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Preferred
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Common
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A) Preferred is noncumulative and nonparticipating.
Dividends declared, $40,000
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5.00
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6.00
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B) Preferred is cumulative and nonparticipating: in arrears 3 years (in addition to the current year). Dividends declared, $65,000
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20.00
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5.00
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C) Preferred is cumulative, in arrears 3 years (in addition to the current year. Dividends declared, $75,000
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24.00
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5.40
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Total par: common = $300,000 (60%) preferred = $200,000 (40%)
Preferred: $200,000 x 5% = $10,000/2,000 = $5.00
Common: $40,000 - $10,000 = $30,000/5,000 = $6.00
Preferred: $30,000 + $10,000 = $40,000/2,000 = $20.00
Common: $65,000 - $40,000 = $25,000/5,000 = $5.00
Preferred: $30,000 + $10,000 + $8,000(ii) = $48,000/2,000 = $24.00
Common: $15,000(i) + $12,000(iii) = $27,000/5,000 = $5.40
5,000 x $60 x 5%
75,000 - (30,000 - 10,000) - 15,000 = 20,000; 20,000(.40) = 8,000
20,000(.60) = 12,000