Colliers, Inc. has 115,000 shares of cumulative preferred stock outstanding. The
ID: 2598530 • Letter: C
Question
Colliers, Inc. has 115,000 shares of cumulative preferred stock outstanding. The preferred stock pays dividends in the amount of $3 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 $850,000 this year.
Colliers, Inc. has 115,000 shares of cumulative preferred stock outstanding. The preferred stock pays dividends in the amount of $3 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 $850,000 this year.
Explanation / Answer
Answer 1) Outstanding Dividend for preferred stock =115000 *3 per unit =$345,000/-
Current year Divided for Preferred stock = 115000* 3 Per unit = $ 345,000/-
So Dividend Payment to Preferred Stockholders = 345000+345000= $690,000/-
Answer 2) Dividend Payment to Common Stockholders = 850000-690000= $160,000/-