Question

Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000...

Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000 shares of no-par common stock were authorized; 750,000 shares were issued on January 1, 2019, at $35 per share. 800,000 shares of $100 par value, 7.5% cumulative, preferred stock were authorized; 540,000 shares were issued on January 1, 2019, at $105 per share. No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp. declared dividends of $15,000,000, payable on February 12, 2022, to holders of record as of January 8, 2022. c. Calculate the common stock dividends per share declared during 2021. (Round your answer to 2 decimal places.)

Homework Answers

Answer #1
  • Requirement asked: requirement ‘C’
  • Workings
  • Annual Preferred stock dividend required to be paid (or accumulated) = 540000 preferred shares x $ 100 par x 7.5% = $ 4,050,000
  • Preferred stock in arrear for 2019 and 2020 = 4050000 + 4050000 = $ 8,100,000
  • Dividend received by preferred stockholder will include:
    Arrear dividend accumulated of 2019 and 2020, and
    Dividend for 2021

    = $ 8100000 + $ 540000 for 2021
    = $ 8,640,000
  • Dividend received by Preferred shareholders = $ 8,640,000
  • Dividend received by Common Shareholder = $ 15000000 – 8640000 = $ 6,360,000
  • Answer
    Common stock dividend per share = $ 6360000 / 750000 shares issued
    = $ 8.48
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000...
Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000 shares of no-par common stock were authorized; 750,000 shares were issued on January 1, 2019, at $35 per share. 800,000 shares of $100 par value, 7.5% cumulative, preferred stock were authorized; 540,000 shares were issued on January 1, 2019, at $105 per share. No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt...
Homestead Oil Corp. was incorporated on January 1, 2016, and issued the following stock for cash:...
Homestead Oil Corp. was incorporated on January 1, 2016, and issued the following stock for cash: 700,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2016, at $18.00 per share. 250,000 shares of $110 par value, 8.00% cumulative, preferred stock were authorized, and 71,000 shares were issued on January 1, 2016, at $140 per share. Net income for the years ended December 31, 2016 and 2017, was $1,450,000 and $2,490,000, respectively. No dividends were...
1,400,000 shares of no-par common stock were authorized; 327,000 shares were issued on January 1, 2016,...
1,400,000 shares of no-par common stock were authorized; 327,000 shares were issued on January 1, 2016, at $30 per share. 426,000 shares of $90 par value, 10.00% cumulative, preferred stock were authorized, and 130,000 shares were issued on January 1, 2016, at $133 per share. Net income for the years ended December 31, 2016, 2017, and 2018, was $4,680,000, $7,040,000, and $9,160,000, respectively. No dividends were declared or paid during 2016 or 2017. However, on December 17, 2018, the board...
1)Towson Corp., was organized on January 2, 2018. During the first year of operation, Towson issued...
1)Towson Corp., was organized on January 2, 2018. During the first year of operation, Towson issued 50,000 shares of $4 par value common stock at a price of $45 cash per share.  On December 31, 2018, Towson reported Net Income of $250,000 and paid $50,000 cash dividends. Use this information to determine the dollar amounts that Towson will report on its year end Balance Sheet for Paid in Capital Common Stock in Excess of par. 2)Towson Corp., had 3,000 shares of...
On January 1, Flounder Corp. had 61,500 shares of no-par common stock issued and outstanding. The...
On January 1, Flounder Corp. had 61,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 11,700 additional shares of common stock for $12 per share. June 15 Declared a cash dividend of $1.90 per share to stockholders of record on June 30. July 10 Paid the $1.90 cash dividend. Dec. 1 Issued 5,200 additional shares of common stock for $13...
On January 1, Grouper Corp. had 61,600 shares of no-par common stock issued and outstanding. The...
On January 1, Grouper Corp. had 61,600 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 12,150 additional shares of common stock for $13 per share. June 15 Declared a cash dividend of $1.65 per share to stockholders of record on June 30. July 10 Paid the $1.65 cash dividend. Dec. 1 Issued 5,400 additional shares of common stock for $13...
6. Earnings per Share with Convertible Bonds On January 1, 2019, Houston Company issued, at par,...
6. Earnings per Share with Convertible Bonds On January 1, 2019, Houston Company issued, at par, 600 $1,000 6% bonds. Each bond is convertible into 10 shares of common stock. Houston’s net income for 2019 was $600,000. The tax rate was 20%. Throughout 2019, 100,000 shares of $10 par common stock were outstanding. In addition, 1,000 shares of 5% $100 par cumulative preferred stock were outstanding. No preferred stock dividends were declared during 2019. None of the bonds were converted...
On January 1, Ayayai Corp. had 61,000 shares of no-par common stock issued and outstanding. The...
On January 1, Ayayai Corp. had 61,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 9,450 additional shares of common stock for $11 per share. June 15 Declared a cash dividend of $1.50 per share to stockholders of record on June 30. July 10 Paid the $1.50 cash dividend. Dec. 1 Issued 4,200 additional shares of common stock for $11...
The following information pertains to JAE Corp. at January 1, Year 1: Common stock, $10 par,...
The following information pertains to JAE Corp. at January 1, Year 1: Common stock, $10 par, 13,000 shares authorized, 2,600 shares issued and outstanding $ 26,000 Paid-in capital in excess of par, common stock 17,100 Retained earnings 52,100 J AE Corp. completed the following transactions during Year 1: Issued 950 shares of $10 par common stock for $29 per share. Repurchased 150 shares of its own common stock for $26 per share. Resold 50 shares of treasury stock for $27...
orth Wind Aviation received its charter during January authorizing the following capital stock: Preferred stock: 8...
orth Wind Aviation received its charter during January authorizing the following capital stock: Preferred stock: 8 percent, par $10, authorized 20,000 shares. Common stock: par $1, authorized 60,000 shares. The following transactions occurred during the first year of operations in the order given: Issued a total of 49,000 shares of the common stock for $11 per share. Issued 10,000 shares of the preferred stock at $12 per share. Issued 3,900 shares of the common stock at $16 per share and...