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Zielflug [23.3K]
3 years ago
9

The Arcadia Company has 200,000 shares of cumulative, seven percent, $200 par value preferred stock outstanding. Last year the c

ompany failed to pay its regular dividend, but the board of directors would like to resume paying its regular dividend this year. Calculate the dividends in arrears and the total dividend that must be paid this year.
Business
2 answers:
ch4aika [34]3 years ago
5 0

Answer:

Dividend in arrears =$2,800,000

Total due this year = $ 5,600,000

Explanation:

Dividend payable per share = Dividend rate (%) × nominal value per share

= 7%× 200 = $14

<em>Arrears dividend </em>

= $14 × 200,000

= $2,800,000

<em>Dividend due for payment this year</em>

Dividend in arrears=2,800,000

Dividend this year =  2,<u>800,000</u>

Total due                    5,600,000

   

mr_godi [17]3 years ago
4 0

Answer:

the dividends in arrears = $2,800,000

the total dividend that must be paid this year = $5,600,000

Explanation:

<u>the dividends in arrears</u>

Last Year = 200,000 shares × $200 × 7%

                = $2,800,000

<u>total dividend that must be paid this year</u>

<em>Note : The Preference Shares are cumulative meaning that arrears in dividends are accumulated to be paid at a future date</em>

Last Year`s Dividend          $2,800,000

<em>Add </em>This Year`s Dividend  $2,800,000

Total                                     $5,600,000

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