Answer:
Preferred stock Dividend Common stock dividend
2021 $5500 $0
2022 $6250 $6050
2021 $6250 $20950
Explanation:
Th dividends are distributed by the firm from he Net Income and are first paid to the preferred stockholders. The dividends paid to preferred stockholders remain constant and any dividend available after paying the preferred stockholders is paid to the common stockholders.
The preferred stock is non cumulative which means that if the company fails to pay full dividends or pays no dividends in a particular year to preferred stockholders, those dividends will not accumulate and will not be paid in the next year or whenever the company declares dividends.
The cash dividends that will be paid to Each class of stock for each year will be as follows,
The preferred stock dividends are fixed at = 50 * 0.05 = $2.5 per share
The total dividends on preferred stock is = 2.5 * 2500 = $6250
<u>2021</u>
Total Dividend declared = $5500
Dividend paid to Preferred stockholders = $5500
Dividend paid to Common stockholders = $0
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<u>2022</u>
Total Dividend declared = $12300
Dividend paid to Preferred stockholders = $6250
Dividend paid to Common stockholders = 12300 - 6250 = $6050
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<u>2023</u>
Total Dividend declared = $27200
Dividend paid to Preferred stockholders = $6250
Dividend paid to Common stockholders = 27200 - 6250 = 20950
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