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c C 11 Green Planet Corp. has (a) 4,500 shares of noncumulative 10% preferred stock with a $2 par value and (b) 16,300 shares
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Answer #1

Answer:

Noncumulative

Preferred

Common

Year 1

$790

$0

Year 2

$1010

$620

Workings:

Year 1:

Amount of Preferred dividend = (4500 shares x $2) x 10% = $900

Total Dividends = $790

Arrear of Dividends = $900 - $790 = $110

Common stock holder will get zero amount of Dividend in year 1.

Year 2:

Amount of Preferred dividend = (4500 shares x $2) x 10% = $900

Arrear of Dividends = $110

Total Dividend paid to preferred stockholder = $900 + $110 = $1010

Total Dividends = $1630

Dividends paid to common stockholder = $1630 - $1010 = $620.

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