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zhannawk [14.2K]
3 years ago
6

Outstanding stock of the West Corporation included 40,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par non-cum

ulative preferred stock. In year 1, West declared and paid dividends of $4,000. In year 2, West declared and paid dividends of $20,000. How much of the year 2 dividend was distributed to preferred shareholders?
Business
1 answer:
Assoli18 [71]3 years ago
3 0

Answer:

Dividend paid = (5%× 10,000 × $10) = $5000.

Explanation:

<em>Preference shares entitles the holders to  participate in a fixed dividend out of the profit made by the company. The divide is always a fixed percentage of the nominal value of the preference shares</em>

It can be cumulative and non-accumulate.

Cumulative <em>simply implies that should the company misses the payment of dividend in a particular year such unpaid dividend would be carried carried forward and paid in arrears in the following year/</em>

Non-cumulative i<em>s the exact opposite of the case . Here, unpaid dividends are not paid in arrears in fact such are forfeited for life.</em>

Dividend in Year 1

Dividend paid in Year 1 was $ 4000 but ought to be $5,000 (5%× 10,000 × $10). An arrear of $1000

Dividend in Year   2

Dividend paid = (5%× 10,000 × $10) = $5000.

Note that the unpaid dividend of $1,000 in year 1 is lost forever

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Suppose that you are an orange grower. Would you expect the demand for your
aksik [14]

It should be noted that the demand for orange will be elastic because when there's a change in price, there'll be a larger change in quantity demanded.

It should be noted that an elastic demand simply means a situation whereby a change in the price of a good lead to a larger change in the quantity demanded.

In this case, the demand for orange will be elastic because when there's a change in price, there'll be a larger change in quantity demanded. For example, an increase in price will make the customers buy other fruits.

Learn more about demand on:

brainly.com/question/25585026

8 0
2 years ago
Murphy's, Inc., has 85,000 shares of stock outstanding with a par value of $1 per share. The market value is $12 per share. The
nexus9112 [7]

Answer:

The correct answer is $177,955.

Explanation:

According to the scenario, the computation of the given data are as follows:

Capital in excess of par account = $74,500

Common stock = $85,000

Retained earning = $141,500

So, we can calculate the balance in the capital in excess of par account be after the dividend by using following formula:

Capital after Dividend = Balance sheet amount of Capital + ( Issued additional share × Capital in excess of par per share )

Where,

Issued additional share = 11% × $85,500 = 9,405

And Capital in excess of par per share = $12 - $1 = $11

By putting the value, we get

Capital after dividend = $74,500 + ( 9,405 × $11)

= $74,500 + $103,455

= $177,955

8 0
2 years ago
The Assembly Department of One Roof, Inc., manufacturer of computers, incurred $300,000 in direct material costs and $70,000 in
Papessa [141]

Answer:

D) $116.67 per EUP

Explanation:

To find out the equivalent unit of production (EUP) for conversion costs we have to divide the total conversion costs by the equivalent units produced:

EUP conversion costs = $70,000 / 600 units = $116.67 per EUP

The EUP for direct materials would = total costs direct materials / equivalent units produced = $300,000 / 1,000 units = $300 per EUP

Both fully completed units and partially completed units are expressed in terms of equivalent units of production.

6 0
2 years ago
Hornberger, Inc. recently paid a dividend of $2.00 per share. The next dividend is expected to be $2.05 per share. Hornberger ha
ohaa [14]

Answer:

Hornberger plows back 22.72% of its earnings into the firm.

Explanation:

Plowback ratio fundamental analysis ratio that measures how much earnings are retained after dividends are paid out.

We can use the relationship g = ROE × b to find the plowback ratio (b).

The growth rate implied by the recent dividend and the expected dividend is estimated using the equation, D1 =  D0 × (1 + g)

$2.05 = $2.00 × (1 + g)

$2.05 - 2.00 = 2.00g

0.05 / 2 = g

g = 2.5%

Then  according to the equation (b)

2.50% = 11.00% × b

b = 2.50%/11.00%

b = 22.72%

3 0
3 years ago
High flyer, inc., wishes to maintain a growth rate of 16 percent per year and a debt-equity ratio of 0.90. the profit margin is
Xelga [282]

Answer: The dividend payout ratio is 46.19%.

We follow these steps in order to arrive at the answer:

We begin with the DuPont identity of RoE.

<u>DuPont Identity:</u>

RoE = Net Profit Margin * Asset Turnover Ratio * Equity Multiplier

Now,  

Equity Multiplier = \frac{1}{Debt Ratio}

And Debt Ratio is also expressed as:

Debt Ratio = \frac{D/E}{1+D/E}

where D/E represents the Debt-Equity Ratio.

Substituting the value of D/E ratio from the question in the debt ratio formula above we get,

Debt Ratio = \frac{0.9}{1+0.9}

Debt Ratio = \frac{0.9}{1.9}----(1)

Substituting (1) in the equity multiplier formula above we get,

Equity Multiplier = \frac{1}{\frac{0.9}{1.9}}

Equity Multiplier = \frac{1.9}{0.9}

Substituting Equity Multiplier from above and the relevant numbers from the question in the DuPont identity we get,

RoE = 0.048 * 1.08 * \frac{1.9}{0.9}

RoE = 0.10944

The relationship between RoE and earnings growth rate g is given by the following formula:

RoE = \frac{g}{(1-p)}, where p is the dividend payout ratio.

Plugging in the values in the formula above we get,

0.10944 = \frac{0.16}{(1-p)}

1-p = \frac{0.16}{0.10944}

1-p = 1.461988304

p = 0.461988304 or 46.19%

3 0
2 years ago
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