Question

1- Packers Inc. had 8%, $1 par value cumulative preferred stock.
Dividends are paid semi-annually, and there are 800,000 shares authorized, 700,000 shares issued and outstanding.
  
a.   Calculate the dividend payout for the full year.
b.   Calculate the semi-annual dividend payout.
c.   If dividends were not paid out for the previous 2 years,
   calculate the total dividend payout for this year (all 3 yrs).

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2- Rodgers Co. had 7.5%, $10 par value cumulative preferred stock.
Dividends are paid quarterly, and there are 500,000 shares authorized, 400,000 shares issued, and 300,000 shares outstanding.
  
a.   Calculate the dividend payout for the full year.
b.   Calculate the dividend payout for each quarter.
c.   If dividends were not paid out for the previous 3 years,
   calculate the total dividend payout for this year (all 4 yrs).

Answer 1

Question.1
Dividend payable only on issued and outstanding share capital.
a.
Ans. 8% of 700000 issued share * $ 1 per share
= $56000

b.
Ans. 8%/ 2 of 700000 issued share * $ 1 per share
= $28000

c.
Ans. In cumulative share dividends are accumulate for all the years in which dividend was not paid ,
Dividend for all 3 years is
8% of 700000 issued share * $ 1 per share * 3 years

= $168000

Question. 2
  
a.
Ans. 7.5% of 300000 issued outstanding shares * $ 10 per share
= $225000

b.
Ans. 7.5%/4 Qtr of 300000 issued outstanding shares * $ 10 per share
= $56250

c.  
Ans. In cumulative share dividends are accumulate for all the years in which dividend was not paid ,
Dividend for all 4 years is
7.5% of 300000 issued share * $ 10 per share * 4 years
= $900000