Question

13 of 47 (22 This Test: 50 pts possible Preferred dividends Acura tabs inc has an outstanding issue of preferred stock with a par value of S40 and an 8% annual dividend a. What is the annual dollar dividend? If it is paid quarterly, how much will be paid each quarter? sois onuae anbr n the current quarter before dividends are paid to common stockholders? arkers how much must be pandt c. If the preferred stock is cumulative and the board of directors has passed the preferred dividend for the last 3 quarters, how much must be paid to preferred stockholders in the current quarter before dividends are paid to common stockholders? a. The annual dollar dividend is s(Round to the nearest cent) It it is paid quarterly, the amount paid each quarter wil be s(Round to the nearest cent ) b. If the preferred stock is noncumulative and the board of directors has passed the preferred dividend for the last 3 quarters, the amount that must be paid to preferred stockholders in the current quarter belore dividends are paid to common stockholders is $ Round to the nearest cent) С.itthe preferred stok ts cumulat ve and the board of dred Shas passed the preferred dividend for the list 3 quarters, the amount that must be paid to preferred stockholders in the current quarter before dividends are paid to common stockholders is (Round to the nearest cent) Enter your answer in each of the answer boxes. O Type here

Answer 1

A	B	C	D	E	F	G	H	I	J	K	L
2
3		a)
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5		Calculation of dividends to preferred stock:
6		Par Value of preferred stock	$40
7		Dividend rate	8%
8		Annual Dividends per preferred stock	$3.20	=D6*D7
9
10		Hence Annual Dollar Dividends to be paid is	$3.20
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12		Amount paid each quarter will be	$0.80	=D10/4
13
14		Hence amount paid each quarter is	$0.80
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16		b)
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18		In the case of non cumulative preferred stocks, dividends not paid so far will not be paid.
19		Thus in the current quarter, the current quarter dividends for preferred stock is to be paid.
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21		Thus dividends paid to preferred stock in current quarter is	$0.80
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23		c)
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25		In the case of cumulative preferred stocks, dividends not paid so far is to be paid first before paying dividends to common stock.
26		Thus in the current quarter, the current quarter dividend and arrear dividend for preferred stock is to be paid.
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28		Thus dividends paid to preferred stock in current quarter is	$3.20	=D21+3*D21
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