Question

National Health Corporation (NHC) has a cumulative preferred stock issue outstanding, which has a stated annual...

National Health Corporation (NHC) has a cumulative preferred stock issue outstanding, which has a stated annual dividend of $10 per share. The company has been losing money and has not paid preferred dividends for the last five years. There are 440,000 shares of preferred stock outstanding and 740,000 shares of common stock. a. How much is the company behind in preferred dividends? If NHC earns $18,000,000 in the coming year after taxes but before dividends, and this is all paid out to the preferred stockholders, how much will the company be in arrears (behind in payments)? Keep in mind that the coming year would represent the sixth year.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution:

a)Calculation of amount of preferred dividends due:

Amount of Preferred dividends due=(Annual dividend*No. of preferred stock outstanding)*No. of years

=($10*440,000)*5

=$22000,000

b)Preferred dividend outstanding at the end of year 6

Accumulated dividend till year 6=Amount of Preferred dividends due till 5 years+Dividend for year 6

=$22000,000+($10*440,000)

=$26400,000

Preferred dividend outstanding at the end of year 6=Accumulated dividend till year 6-Dividend paid

=$26400,000-$18,000,000

=$8400,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Enterprise Storage Company has 530,000 shares of cumulative preferred stock outstanding, which has a stated dividend...
Enterprise Storage Company has 530,000 shares of cumulative preferred stock outstanding, which has a stated dividend of $6.75. It is six years in arrears in its dividend payments. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. How much in total dollars is the company behind in its payments? (Do not round intermediate calculations. Input your answer in dollars, not millions (e.g., $1,234,000).)    Dividend in arrears b. The...
Question#3: Cash Dividends with Cumulative Preferred Stock       Tucker Exports has the following stock outstanding: 25,000...
Question#3: Cash Dividends with Cumulative Preferred Stock       Tucker Exports has the following stock outstanding: 25,000 shares of $80 par value, 6% cumulative preferred stock 150,000 shares of $2.50 par value, common stock The company declares and pays the following dividends for the past four years: 2017              $ 65,000 2018              $412,000 2019              $303,000 2020              No dividends are paid Compute the total cash dividends paid to each class of stock in 2017 through 2020 using the following table. Arrearage Preferred Common...
Question 2 Rachel’s Designs has 1,700 shares of 5%, $50 par value cumulative preferred stock issued...
Question 2 Rachel’s Designs has 1,700 shares of 5%, $50 par value cumulative preferred stock issued at the beginning of 2016. All remaining shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2016 or 2017. The company plans to pay total dividends of $14,000 in 2018. How much of the $14,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders? Preferred dividends for 2018...
Corrao Foods Corporation has 5000 shares of 7%, $15 par value, cumulative preferred stock on December...
Corrao Foods Corporation has 5000 shares of 7%, $15 par value, cumulative preferred stock on December 31, 2019and 150,000 shares of $1 par value common stock outstanding on December 31, 2020. In 2019, a $2000 dividend was declared and paid. In 2020, $33,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2020 (assuming no dividends in arrears prior to 2019)? Show calculations. Required: Show calculations
The X Company has the following stock outstanding: 6% Preferred stock, $100 par value, cumulative Common...
The X Company has the following stock outstanding: 6% Preferred stock, $100 par value, cumulative Common stock, $50 par value $300,000 $600,000 Preferred stock dividends are in arrears for 2004 and 2005. If the company declares and pays $64,000 in dividends in 2006, the amount received by the preferred stockholders would be A) $36,000. B) $18,000. C) $54,000. D) $64,000. *can I please can an explanation of how you got the answer, it would be very helpful*
The following information is provided for Bold Company for the year 2017: Preferred stock, 7%, $50...
The following information is provided for Bold Company for the year 2017: Preferred stock, 7%, $50 par value, 2,900 shares issued and outstanding Common stock, $100 par value, 3,900 shares issued and outstanding Dividends in arrears for three prior years (2014­­–2016) Total dividends declared and paid in 2017 were $69,000. How much of the 2017 dividend payment was paid to the preferred stockholders assuming the preferred stock is cumulative? $10,150. $40,600. $28,400. $58,850.
Assume CGM Corp has issued and outstanding 22,000 shares of 5%, $25 par value preferred stock...
Assume CGM Corp has issued and outstanding 22,000 shares of 5%, $25 par value preferred stock and issued and outstanding 15,000 shares of $15 stated value common stock. The board of directors declares dividends of $100,000 on December 15, 2020, the preferred stock is cumulative, and dividends paid to the preferred stockholders has been as follows: 2017 - $13,750; 2018 - $21,250; and 2019 - $15,000. What amount is allocated to common stockholders?
The Long Island Ducks has stock outstanding as follows: 12,000 shares of cumulative preferred 2% stock....
The Long Island Ducks has stock outstanding as follows: 12,000 shares of cumulative preferred 2% stock. $150 par and 50,000 shares of $10 par common. During the first four years of operations, the following were distributed as dividends: first year, $27,000; second year, $60,000; third year, $80,000; fourth year $90,000. Determine the amount of dividends allocated to preferred stockholders and to common stockholders for each of the four years.
Preferred Stock 5% $11 Par Value 5,500 shares authorized 4000 shares issued and outstanding Common Stock...
Preferred Stock 5% $11 Par Value 5,500 shares authorized 4000 shares issued and outstanding Common Stock $.20 Par Value 2,000,000 shares authorized 1,650,000 shares issued and outstanding Requirement 1. Sapphire declares cash dividends of $ 28,000 for 2018. How much of the dividends goes to preferred? stockholders? How much goes to common? stockholders? ?(Complete all input boxes. Enter? "0" for any zero? amounts.) Sapphire?'s dividend would be divided between preferred and common stockholders in this? manner: Total Dividend Dividend to...
521. Car company has issues 75,000 of $1 par, 6% cumulative preffered stock. preferred dividends are...
521. Car company has issues 75,000 of $1 par, 6% cumulative preffered stock. preferred dividends are 3 years in arrears. Car company has 200,000 shares of $0.50 par common stock issued and 50,000 shares of treasury stock. Total dividends declared in currebt year are $240,000. what is dividend per share the common stockholders will receive ?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT