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katrin2010 [14]
3 years ago
14

Seaside Developments Inc. has $200,000 of no par value 4% cumulative preferred shares, and 12,000 shares of no par value common

shares outstanding. In its first three years of operation, the company paid cash dividends as follows: Year 1: $8,000; Year 2: $18,000; and Year 3: $24,000.
The amount of dividends received by the preferred shareholders in year 2 was ____.
Business
1 answer:
Yakvenalex [24]3 years ago
6 0

Answer:

$8,000

Explanation:

The computation of the amount of dividend received by the preferred shareholders in year 2 is shown below:

Annual preferred dividend = Par value of preferred stock ×  Dividend rate on preferred stock

= 200,000 × 4%

= $8,000

By multiplying the par value with the dividend rate we can get the amount of dividend received and the same is shown above

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Karl Marx's economic theories resulted in which global change?
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A small business has determined that the machinery they currently use will wear out in 16 years. To replace the new machine when
Afina-wow [57]

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Explanation:

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Present value = ?

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3 years ago
If a firm increases its dividend payout rate the: firm will have less cash available for new investment. Unselected firm’s sto
KengaRu [80]

Answer:

1. If a firm increases its dividend payout rate the: firm will have less cash available for new investment. True

2. Stock price will likely fall by the same percentage. False

3. Retention ratio will rise at the same rate. False

Explanation:

1. If a firm increases its dividend payout rate the: firm will have less cash available for new investment. This assertion is true because the company would be paying out a larger portion of earnings as dividends, hence the balance portion for new investment will be lower as a result.

2. Stock price will likely fall by the same percentage. This assertion is most unlikely because normally, if a particular stock is paying higher dividends investors will have high expectation and be willing to pay a higher price to buy a stock that pays high dividends

3. Retention ratio will rise at the same rate. This conclusion is also incorrect because pay out ratio and retention ratio have an inverse relationship. If more dividend is paid out, then less money is retained.

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