Why is the cumulative feature of preferred stock particularly important to preferred stockholders?
Why is the cumulative feature of preferred stock particularly important to preferred stockholders?
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If dividends are not paid in any one year, they are accumulated and must be paid in total before the paying the common stockholders. This is the feature of cumulative dividend. This feature ensures that the shareholders receive all the unpaid dividends. The cumulative dividend feature makes a corporation very aware of its obligation to the preferred stockholders even though the preferred dividend does not carry any legal obligation like that of debt. If the company fails to pay the accumulated dividend, it has to compensate the shareholders by providing new securities or bonds as forgiveness for non-payment.
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Why is the cumulative feature of preferred stock particularly important to preferred stockholders?
12. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the...
12. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the par value of the preferred stock. B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. C) means that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock. D) enables a preferred...
Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2018 and 2019
Requirement 1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2018 and 2019 if total dividends are $7,000 in 2018 and $54,000 in 2019. Assume no changes in preferred stock and common stock in 2019. (Assume all preferred dividends have been paid prior to 2018. Complete all input boxes. Enter a "0" for zero amounts. For the current year preferred dividend, be sure to enter the calculated dividend on...
Need answers Chapter 11 Stockholders' Equity: Paid-In Capital Stockholders' equity Capital stock 7% cumulative preferred stock,...
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Chapter 11 Stockholders' Equity: Paid-In Capital Stockholders' equity Capital stock 7% cumulative preferred stock, $100 par value . . . . . . . . . . . . . . . . . . . . Common stock, $5 par value, 5,000,000 shares $ 15,000,000 20,000,000 44,000,000 64,450.6 Additional paid-in capital: Hetained earnings $143,450,000 From this information, compute answers to the following questions: a. How many shares of preferred stock have been issued? b. What is the...
Stockholders' equity: Capital stock: 7% cumulative preferred stock, $100 par value $ 15,000,000 Common stock, $5...
Stockholders' equity: Capital stock: 7% cumulative preferred stock, $100 par value $ 15,000,000 Common stock, $5 par value, 5,000,000 shares authorized, 4,400,000 shares issued and outstanding 22,000,000 Additional paid-in capital: Common stock 42,000,000 Retained earnings 64,450,000 Total stockholders’ equity $ 143,450,000 From this information, compute answers to the following questions. a. How many shares of preferred stock have been issued? b. What is the total amount of the annual dividends to which preferred stockholders are entitled? c. What was the...
Dividends Year Assume Preferred Stock is Non-Cumulative Assume Preferred Stock is Cumulative Declared and Paid Preferred...
Dividends Year Assume Preferred Stock is Non-Cumulative Assume Preferred Stock is Cumulative Declared and Paid Preferred Dividend Common Dividend Preferred Dividend Common Dividend 2018 10,000 2019 55,000 2020 80,000 Since it was organized in January 2015, HobKnob Production Corporation has had 1500 shares of $100 par value, 10% preferred stock and 15,000 shares of $20 par value common stock. It has declared and paid dividends each year as shown below. Show the distribution of total dividends to each class of...
Hepner Corporation has the following stockholders' equity accounts: Preferred stock (5% cumulative dividend) Common stock Additional...
Hepner Corporation has the following stockholders' equity accounts: Preferred stock (5% cumulative dividend) Common stock Additional paid-in capital Retained earnings 680,00e 930,000 480,000 1,130,000 The preferred stock is participating. Wasatch Corporation buys 70 percent of this common stock for $1,750,000 and 60 percent of the preferred stock for $810,000. The acquisition-date fair value of the noncontrolling interest in the common shares was $750,000 and was $540,000 for the preferred shares. All of the subsidiary's assets and liabilities are viewed as...
Stockholders’ Equity Paid-In Capital Capital Stock 8% Preferred stock, $______par value, cumulative, 10,000 shares authorized 6000...
Stockholders’ Equity Paid-In Capital Capital Stock 8% Preferred stock, $______par value, cumulative, 10,000 shares authorized 6000 shares issued & outstanding………………………………………………… $900,000 Common stock, $4 par value, 460,000 shares authorized; ______ shares issued and ______ shares outstanding$1,650,000 Total Capital Stock…………………………………………………………………… 2,550,000 Additional paid-in capital In excess of par value-preferred stock……………………………………………….. 60,000 In excess of par value-common stock……………………………………………... 825,000 Total Additional PIC……………………………………………………………… 885,000 Retained Earnings…….800,000 Total paid-in capital and retained earnings 4,235,000 Less: Treasury stock (12,000 shares) (180,000) Total stockholders' equity$4,055,000...
Raphael Corporation’s balance sheet shows the following stockholders’ equity section. Preferred stock—5% cumulative, $___ par value,...
Raphael Corporation’s balance sheet shows the following stockholders’ equity section. Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 75,000 Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding 100,000 Retained earnings 330,000 Total stockholders' equity $ 505,000 1. What are the par values of the corporation’s preferred stock and its common stock? There's no stated par value or common stock amount but each example I've seen has those amounts stated. How do I go...
What is preferred stock? Stockholders typically have voting rights. What does this mean? Do preferred stockholders...
What is preferred stock? Stockholders typically have voting rights. What does this mean? Do preferred stockholders have voting rights? Why or why not?
Requirement 1. Assume the preferred stock is cumulative. Compute the amount of dividends to preferred and...
Requirement 1. Assume the preferred stock is cumulative. Compute the amount of dividends to preferred and common shareholders for 2018 and 2019 if total dividends are $11,000 in 2018 and $49,000 in 2019. Compute the dividends for 2018, then for 2019. (Complete all answer la Data Table Class of Stock 2019 2018 11,000 Preferred $ Tri State Telecom, Inc. Common Stockholders' Equity $ 11,000 $ 49,000 Total Paid-in capital: 100,000 Preferred stock, 12%, $5 par, 100,000 shares authorized, 20,000 shares...
12. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the par value of the preferred stock. B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. C) means that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock. D) enables a preferred...
Requirement 1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2018 and 2019 if total dividends are $7,000 in 2018 and $54,000 in 2019. Assume no changes in preferred stock and common stock in 2019. (Assume all preferred dividends have been paid prior to 2018. Complete all input boxes. Enter a "0" for zero amounts. For the current year preferred dividend, be sure to enter the calculated dividend on...
Need answers
Chapter 11 Stockholders' Equity: Paid-In Capital Stockholders' equity Capital stock 7% cumulative preferred stock, $100 par value . . . . . . . . . . . . . . . . . . . . Common stock, $5 par value, 5,000,000 shares $ 15,000,000 20,000,000 44,000,000 64,450.6 Additional paid-in capital: Hetained earnings $143,450,000 From this information, compute answers to the following questions: a. How many shares of preferred stock have been issued? b. What is the...
Dividends Year Assume Preferred Stock is Non-Cumulative Assume Preferred Stock is Cumulative Declared and Paid Preferred Dividend Common Dividend Preferred Dividend Common Dividend 2018 10,000 2019 55,000 2020 80,000 Since it was organized in January 2015, HobKnob Production Corporation has had 1500 shares of $100 par value, 10% preferred stock and 15,000 shares of $20 par value common stock. It has declared and paid dividends each year as shown below. Show the distribution of total dividends to each class of...
Hepner Corporation has the following stockholders' equity accounts: Preferred stock (5% cumulative dividend) Common stock Additional paid-in capital Retained earnings 680,00e 930,000 480,000 1,130,000 The preferred stock is participating. Wasatch Corporation buys 70 percent of this common stock for $1,750,000 and 60 percent of the preferred stock for $810,000. The acquisition-date fair value of the noncontrolling interest in the common shares was $750,000 and was $540,000 for the preferred shares. All of the subsidiary's assets and liabilities are viewed as...
Requirement 1. Assume the preferred stock is cumulative. Compute the amount of dividends to preferred and common shareholders for 2018 and 2019 if total dividends are $11,000 in 2018 and $49,000 in 2019. Compute the dividends for 2018, then for 2019. (Complete all answer la Data Table Class of Stock 2019 2018 11,000 Preferred $ Tri State Telecom, Inc. Common Stockholders' Equity $ 11,000 $ 49,000 Total Paid-in capital: 100,000 Preferred stock, 12%, $5 par, 100,000 shares authorized, 20,000 shares...
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