Ch. 11 Pro: × OC ezto.mheducation.com/hm.tpx ::: Apps ? Bookmarks D ? Blackboard

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Ch. 11 Pro: × OC ezto.mheducation.com/hm.tpx ::: Apps ? Bookmarks D ? Blackboard M McGraw-Hill Connect b Pearson OM D MACRO 9 Maple Just 11 Really Helpfu GMU Account GMU Parking os Mason Mail Other bookmarks E11-18 Computing Dividends on Preferred Stock and Analyzing Differences LO11-4, 11-7, 11-8 The records of Hollywood Company reflected the following balances in the stockholders' equity accounts at the end of the current year Common stock, $11 par value, 45,000 shares outstanding Preferred stock, 11 percent, $9 par value, 7,000 shares outstanding Retained eamings, $235,000 On September 1 of the current year, the board of directors was considering the distribution of an $84,000 cash dividend. No dividends were paid during the previous two years. You have been asked to determine dividend amounts under two independent assumptions (show computations): a. The preferred stock is noncumulative b. The preferred stock is cumulative. Required: 1. Determine the total and per share amounts that would be paid to the common stockholders and the preferred stockholders under the two independent assumptions. (Round "per share" to 2 decimal places.) Common Total Per share Cumulative: Total Per share Hints References e eBook & Resources Hint #1 6:51 PM 0 Type here to search 4/26/2018

Explanation / Answer

Dividend distribution :

Annual preferred dividend = 7000*9*11% = 6930

Preferred Common Non cumulative Total 6930 77070 Per Share 0.99 1.71 Cumulative Total 6930*3 = 20790 63210 Per Share 2.97 1.40

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