Question

York’s outstanding stock consists of 90,000 shares of noncumulative 7.5% preferred stock with a \$5 par...

York’s outstanding stock consists of 90,000 shares of noncumulative 7.5% preferred stock with a \$5 par value and also 270,000 shares of common stock with a \$1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:

 2015 total cash dividends \$23,000 2016 total cash dividends 31,700 2017 total cash dividends 235,000 2018 total cash dividends 385,000 Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined.

 Years Total cash dividends paid Paid to Preferred Paid to Common Dividends in Arrears (a) (b) (c=a-b) 2015 \$23000 \$23000 0 0 2016 \$31700 \$31700 0 0 2017 \$235000 \$33750 \$201250 0 2018 \$385000 \$33750 \$351250 0 Total 674700 122200 552500

Explanation:-

 Par value per Preferred Share Dividend Rate Dividends per Preferrd share No. of Preferred shares Preferred Dividends (a) (b) (c=a*b) (d) (e=c*d) Annual preferrd dividend \$5.00 7.50% \$0.375 90000 \$33750

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