Dividing dividends between preferred and common stock [10-15 min]Northern Communications h...

Dividing dividends between preferred and common stock [10-15 min]

Northern Communications has the following stockholders’ equity:

Requirements

1. First, determine whether preferred stock is cumulative or noncumulative.

---

2. Compute the amount of dividends to preferred and to common for 2011 and 2012 if total dividends are $12,200 in 2011 and $55,000 in 2012.

---

3. What is the average price at which each preferred share sold for? What is the average price at which each common share sold for?