Dividend Distribution Rydon Corporation began business on March 1, 2013. At that
ID: 2547870 • Letter: D
Question
Dividend Distribution
Rydon Corporation began business on March 1, 2013. At that time, it issued 21,000 shares of $50 par value, seven percent cumulative preferred stock and 100,000 shares of $5 par value common stock. Through the end of 2015, there had been no change in the number of preferred and common shares outstanding.
Required
a. Assume that Rydon declared dividends of $0 in 2013, $185,000 in 2014, and $205,000 in 2015. Calculate the total dividends and the dividends per share paid to each class of stock in 2013, 2014, and 2015. Round to two decimal places.
b. Assume that Rydon declared dividends of $0 in 2013, $73,500 in 2014, and $155,000 in 2015. Calculate the total dividends and the dividends per share paid to each class of stock in 2013, 2014, and 2015. Round to two decimal places.
Year Preferred
Stock Common
Stock Preferred
per share Common
per share 2013 $Answer $Answer $Answer $Answer 2014 Answer Answer Answer Answer 2015 Answer Answer Answer Answer
Explanation / Answer
Calculate the total dividends and the dividends per share paid to each class of stock in 2013, 2014, and 2015
Annual preferred dividend = 21000*50*7% = 73500
b. Assume that Rydon declared dividends of $0 in 2013, $73,500 in 2014, and $155,000 in 2015.
Annual preferred dividend = 21000*50*7% = 73500
Year Preferred stock Common stock Preferred per share Common per share 2013 0 0 0 0 2014 147000 38000 7 0.38 2015 73500 131500 3.50 1.32