What is the total dividend payment to preferred shareholders

Assignment Help Accounting Basics

Reference no: EM131450134

Q1. Assume that Hunter Corporation has 30,000 shares of common stock outstanding at $100 par. Each share will receive a $10 dividend. (It's a 10% stock, so $100 x 10% = $10.)

The company also has 5,000 shares of cumulative, participating, preferred stock outstanding at $100 par. Each share will receive a $10 dividend payment. (It's also a 10% preferred stock, so $100 x 10% = $10.) This stock participates at the 20% level, meaning that these stockholders will receive 20% of whatever excess dividends are left over after the initial dividends have been paid to both sets of stockholders.

a. What's the total dividend payment if both the preferred and common stockholders if receive their $10 a share?

b. If Hunter Corporation commits to paying a total $450,000, what is the total dividend payment to preferred shareholders? What is the total dividend payment to common shareholders?

c. Using your answers to b. above, what is the dividend per share of preferred stock? What is the dividend per share of common stock?

Q2. When Fujioka Company incorporated, it was approved to authorize 1,000,000 shares of common stock. During the first five years it sold 350,000 shares and repurchased 25,000 on the open market. At the end of five years:

a. How many shares were authorized?

b. How many shares were issued?

c. How many shares were outstanding?

Q3. Assume you want to invest in Sam's company. You have a choice of buying preferred stock, common stock or to loan her the same amount. Select the option that suits you best, and explain why you would choose it. Would your answer be affected by age or family circumstances? (Note: There is no right or wrong answer to this question. Please be sure to include the characteristics that make your choice most attractive and the reasons you didn't select the other alternatives.)

Reference no: EM131450134

Questions Cloud

How might organizations combat the problems resulting : It is sometimes easy to forget that humans are not unlike other animals. Economist John Maynard Keynes recognized this when he commented.

What is the debt and equity ratio at the end of year : What is the Debt/Equity Ratio at the end of year 2009 using the following info?

What are the pros and cons of this tactic : How do you feel about the practice of taking out additional long-term debt to finance the repurchase of common stock? What are the pros and cons of this tactic.

Define the term multitasking : Multitasking-doing two or more things at once, or rapidly switching from one task to another-is a characteristic of the Millennial generation.

What is the total dividend payment to preferred shareholders : If Hunter Corporation commits to paying a total $450,000, what is the total dividend payment to preferred shareholders

List the main components of a business plan : .Give examples of how HR managers duties today are different from 30 years ago?List the main components of a business plan, and describe each briefly.

How would you design a bonus and reward program : It might seem obvious that people will be motivated by bonuses, but many scholars question this premise. Alfie Kohn has long suggested that workers.

Categorize different scheduling procedures : Categorize different scheduling procedures for various types of service operations, such as restaurants, hospitals, and airlines.

Explain the components of a flexible-cafeteria benefit plan : Explain the components of a flexible or cafeteria benefit plan. Discuss the hurdles that must be overcome before such plans will achieve greater acceptance.

User Account

All Pages