Question

Purchase of Treasury Stock Themen dhe ingle dou 500 to preserved. Wheron Califoron Manufacturing hos single class of common sech and dividend of which oder nullative preferred stock requires the sporto pay on o r in one 's On jonu 2011 declared neither preferred nor common dividends in 2010. From 2000, respectively mined they would be able to pay 19,000, 512.000, and Required: Show how these anticipated payments will be split between preferred Dividends Dividends Arrearst to pls to cls prelerred and common sockholders Dear Amount Available 6500 010 out 12 13 4000 9000 12000 10000 9000 10500 6500 1500 85000 In Class Exercise: Preferred Stock / Common Stock dividends percent, $10 par value, cumulative ere declared on preferred stock. In 2011, Seashell Corporation has 25.000 shares outstanding of 8 percent, $10 par valve preferred stock. In 2009 and 2010, no dividends were declared on preferred SOON Seashell had a profitable year and decided to pay dividends to stockholders of both phone and common stock. bay to the common If Seashell has $200.000 available for dividends in 2011. how much could it pay to the com stockholders?

Answer 1

Answer : Seashell could pay to its common stockholders = $140,000

Explanation:

Par year preferred stock dividends = 25,000 shares * $10 * 8% = $20,000

Preferred stock dividends arrears for 2 years (2009 & 2010) = $20,000 82 years = $40,000

Seashell could pay to its common stockholders =

Cash available for dividends - Preferred stock dividends arrears -Preferred stock dividends for current year

= $200,000 -  $40,000 -  $20,000 = $140,000