Question

Garda World Security Corporation has the following shares, taken from the equity section of its balance...

Garda World Security Corporation has the following shares, taken from the equity section of its balance sheet dated December 31, 2014.

  Preferred shares, $4.38 non-cumulative,
         35,000 shares authorized and issued* 2,240,000
  Common shares,
         70,000 shares authorized and issued* 1,120,000

*All shares were issued during 2012.

During its first three years of operations, Garda World Security Corporation declared and paid total dividends as shown in the last column of the following schedule.

Required:
Part A
1.

Calculate the total dividends paid in each year to the preferred and to the common shareholders.

Year Preferred Dividend Common Dividend Total Dividend
2012 $150,000
2013 390,000
2014 550,000
Total for three years $0 $0 $1,090,000

      

2.

Calculate the dividends paid per share to both the preferred and the common shares in 2014. (Round your answers to 2 decimal places.)

Dividends Paid per Share
Preferred shares
Common shares

  

Part B
1.

Calculate the total dividends paid in each year to the cumulative and to the common shareholders assuming preferred shares are cumulative.

Year Preferred Dividend Common Dividend Total Dividend
2012 $150,000
2013 390,000
2014 550,000
Total for three years $0 $0 $1,090,000


      

2.

Calculate the dividends paid per share to both the preferred and the common shares in 2014 assuming preferred shares are cumulative. (Round your answers to 2 decimal places.)

Dividends Paid per Share
Preferred shares
Common shares

     

Homework Answers

Answer #1

1)

Calculate the total dividends paid in each year to the preferred and to the common shareholders.

Preferred Common Total dividend
2012 150000 0 150000
2013 153300 236700 390000
2014 153300 396700 550000
Total 456600 633400 1090000

dividend per share = Preferred = 153300/35000 = 4.38; Common = 396700/70000 = 5.67

1)

Calculate the total dividends paid in each year to the preferred and to the common shareholders.

Preferred Common Total dividend
2012 150000 0 150000
2013 156600 233400 390000
2014 153300 396700 550000
Total 459900 630100 1090000

dividend per share = Preferred = 153300/35000 = 4.38; Common = 396700/70000 = 5.67

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