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Marigold Corp. has outstanding 595000 shares of $2 par common stock and 113000 shares of no-par...

Marigold Corp. has outstanding 595000 shares of $2 par common stock and 113000 shares of no-par 5% preferred stock with a stated value of $5. The preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except the past two years and the current year.

Assuming that $218000 will be distributed as a dividend in the current year, how much will the common stockholders receive?

$189750.
$161500.
Zero.

$133250.
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Answer #1
Correct Option D i.e. $133250
Total Dividend distributed          218,000
Less: Dividend to first year of Proffered stockholder            28,250 ((113000*5)*5%)
Less: Dividend to second year of Proffered stockholder            28,250 ((113000*5)*5%)
Less: Dividend to third year of Proffered stockholder            28,250 ((113000*5)*5%)
Net dividend portion distributed to common stockholders          133,250
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