Colliers, Inc. has 100,700 shares of non-cumulative preferred stock outstanding.
ID: 2461732 • Letter: C
Question
Colliers, Inc. has 100,700 shares of non-cumulative preferred stock outstanding. The preferred stock pays dividends in the amount of $2 per share, but because of cash flow problems, the company did not pay any dividends last year. The board of directors plans to pay dividends in the amount of $607,000 this year.
What amount will go to preferred stockholders?
How much of the cash dividends will be available for common stockholders?
Colliers, Inc. has 100,700 shares of non-cumulative preferred stock outstanding. The preferred stock pays dividends in the amount of $2 per share, but because of cash flow problems, the company did not pay any dividends last year. The board of directors plans to pay dividends in the amount of $607,000 this year.
Explanation / Answer
amount will go to preferred stockholders=100,700*$2 per share=$201,400(shares of non-cumulative preferred stock outstanding)
the cash dividends will be available for common stockholders=$607,000-201,400=$405,600.