Green Planet Corp. has (a) 5,000 shares of
noncumulative 10% preferred stock with a $2 par value and
(b) 17,000 shares of common stock with a $0.01 par value.
During its first two years of operation, Green Planet declared and
paid the following total cash dividends. Compute the dividends paid
each year to each of the two classes of stockholders:
preferred and common.
|Year 1 total cash dividends||$||800|
|Year 2 total cash dividends||$||1,700|
Annual dividend on preferred stock = Number of preferred shares x Par value per preferred share x Dividend rate
= 5,000 x 2 x 10%
Dividend distribution table
|Dividend paid to preferred stockholder's||Dividend paid to common stockholder's|
First, dividend of $1,000 will be paid to preferred stockholder's and then remaining dividend will be paid to common stockholder's.
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