Question

Massive Corp. is authorized to issue unlimited $0.80 no-par preferred shares and unlimited no-par common shares. There are 14,000 preferred and 42,000 common shares outstanding. In a five-year period, annual dividends paid were $1,000, $4,000, $74,000, $4,000, and $148,000, respectively. Required: Calculate the amount of dividends that would be paid to each share class for each year under the following separate cases. Where applicable, the matching dividend per common share is $1.00. Case A Preferred shares are cumulative and non-participating. Total Paid Preferred Common Year 1 2 Partial Partial Arrears Current Total Partial Arrears Current Total 5

Answer 1

Date Page Case A Preferred shases are cumulative & non participating. Particulars. Total paid Preferred Common. Paustal $1ooo ooo Partial $4000 4000 Ascean $17400 $ 17400 Current $56600 & 566 $ 11200 $45400 Total $74000 $28600 45400 Partial $4000 $4000 Ameans $7200 $7200 Current $140800 $41200 $129600 Total $148000 $18400 $129600 Note at han y Reefeied shapes, dividend & 14000 x 0.8 $11200 cumulative Case B+ & Year Prefered shaes are non non paoficipaling Total Paid Preferred $1000 $1000 $ 4000 $ 4000 $ 74000 $11200 $148000 $11200 Common. -- - $62800 $136300

Icare preference shoes are only felly pashcapabing Year Parhulan Total paid Preferred Common. bo Current $10000 $7000 Current $ 4000 $4000 - Current $ 3200 $||200 Matching $ 42000 $ 42000 Balance $20800 $5200 $ 15600 Total $74000 $ 16 YOO 957600 Current $ 4000 $ 4000 15 Current $1200 $11200 Matching $42000 $42000 Balance $94800 $23700 $7100 Total $148000 $34900 $113100

Case Dt Preference shares non cumulatine & partially participating upto 0.80 pel share Year Particulas Totalpaid Preferred Common I Current $1000 $1000 - 2cument $ 4000 $40001 3 Current $11200 $41200 Matching $ 42000 - $42000 Balance $20800 $ 1200 $ 9600 Total $74000 $ 22400 $ 51600 y Current $400 $4000 5 Current $11200 $||200 Matching $42000 $ 42000 Balance $94800 $11200 $83600 Total $148000 $22400 $125600