Ask Question
21 March, 05:06

Written, Inc. has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 6% preferred stock with a stated value of $5. Dividends have been paid in every year except the past two years and the current year. Assuming that $234,000 will be distributed, and the preferred stock is cumulative and participating, how much will the common stockholders receive

+3
Answers (1)
  1. 21 March, 09:03
    0
    Common stockholder will receive = $126,000

    Explanation:

    As per the data given in the question,

    Preferred stock capital = $600,000

    Rate of preferred dividend = 6%

    Annual preferred dividend = $600,000*6%

    =$36,000

    Cumulative preferred dividend = $36,000 * 2 = $72,000

    Total amount of dividend paid = $234,000

    Arrears cumulative dividend = $72,000

    Current year preferred dividend = $36,000

    Amount of common stock is

    = $234,000 - $72,000 - $36,000

    = $126,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Written, Inc. has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 6% preferred stock with a stated value of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers