Question

Green Planet Corp. has (a) 5,000 shares of cumulative 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

Answer 1

	Par value per	Divdiend	Dividend per	Number of	Preferred Dividend
	Preferred share	Rate	Preferred share	Preferred share	for 1 year
Calculation of Preferred Dividend	$2	10%	$0.20	5,000	$1,000
	Year 1	Year 2
Total Cash Dividend	$800	$1,700
Dividend paid to preferred shareholders	$800	$1,200
Dividend paid to equity shareholders	$0	$500
For Year dividend to preferred shareholders shall include the remaining dividend of Year 1 which is $200