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4 years ago

Dividends on Preferred and Common Stock

Business

1 answer:

Kaylis [27]4 years ago

7 0

Answer:

Year Preferred div. Common div. Total

1 $80,000 $0 $80,000

2 $90,000 $0 $90,000

3 $130,000 $20,000 $150,000

4 $100,000 $50,000 $150,000

5 $100,000 $60,000 $160,000

6 $100,000 $80,000 $180,000

Explanation:

dividends declared:

Year 1, $80,000

Year 2, $90,000

Year 3, $150,000

Year 4, $150,000

Year 5, $160,000

Year 6, $180,000

preferred stock 250,000 cumulative 2%, $20 par = $100,000 in preferred dividends per year (since the stocks are cumulative, if the dividends are not paid in one year, they accumulative until next year).

common stock 500,000, $15 par

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