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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 |
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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