Question

PLEASE ANSWER FULLY! THANK YOU As of January 2016,  Magna Refrigeration Co has 6% Preferred stock, \$100...

PLEASE ANSWER FULLY! THANK YOU

 As of January 2016,  Magna Refrigeration Co has 6% Preferred stock, \$100 par value 10,000 shares  issued and outstanding; Common stock, \$5 par value, 100,000 shares  issued and outstanding.(50 points) The following dividends  were declared and paid  in 2016, 2017 and 2018 2015 No dividends were declared and paid ·         2016 \$15,000 ·         2017 \$40,000 ·         2018 \$110,000 a)    Assuming the preferred stock were non-cumulative, how much dividends did preferred and common stockholders receive for each year dividends were declared. b)  Calculate Dividend Per Share for each year c)    Assuming the preferred stock were cumulative, how much dividends did preferred and common stockholders receive for each year dividends were declared. d)  Calculate Dividend Per Share for each year

Homework Answers

Answer #1

a) If preferred stock are non cumulative

 Total dividend Preferred dividend Preferred dividend per share Common Dividend Common Dividend per share 2015 0 0 0 0 0 2016 15000 15000 15000/10000 = 1.50 0 0 2017 40000 40000 40000/10000 = 4 0 0 2018 110000 50000 50000/10000 = 5 60000 60000/100000 = 0.60 Total 165000 105000 60000

Annual preferred dividend = 10000*100*5% = 50000

b) If preferred stock are cumulative

 Total dividend Preferred dividend Preferred dividend per share Common Dividend Common Dividend per share 2015 0 0 0 0 0 2016 15000 15000 15000/10000 = 1.50 0 0 2017 40000 40000 40000/10000 = 4 0 0 2018 110000 110000 110000/10000 = 11 0 0 Total 165000 165000 0
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