Question

Chicago Company reported the following information at the end of the current year:

Common stock ( $10 par value; 49,000 shares outstanding)	$	490,000
Preferred stock, 15% ( $12 par value; 9,900 shares outstanding)		118,800
Retained earnings		290,500

The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared during the previous two years. Three independent cases are assumed:

Case A: The preferred stock is noncumulative; the total amount of dividends is $40,500.

Case B: The preferred stock is cumulative; the total amount of dividends is $53,460.

Case C: The preferred stock is cumulative; the total amount of all dividends is $91,900 .

Required:

1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. (Round "Dividends per Share" to 2 decimal places.)

Answer 1

	preferred dividend	Common	Total	Dividend per share-preferred	Dividend per share-common
Case A	17820	22680	40500	1.8	0.46
Case B	53460	0	53460	5.4	0
Case C	53460	38440	91900	5.4	0.78