On December 31, 2014, the board of directors is considering the distribution of a cash dividend to the common and preferred shareholders. No dividends were declared during 2012 or 2013. Three independent cases are assumed:
Case A:
The preferred shares are noncumulative; the total amount of 2014 dividends would be $30,000.
Case B:
The preferred shares are cumulative; the total amount of 2014 dividends would be $30,000. Dividends were not in arrears prior to 2012.
Case C:
Same as Case B, except the amount is $75,000.
Required:
1-a.
Compute the amount of dividends, in total, payable to each class of shareholders for each case.
1-b.
Compute the amount of dividend per share, payable to each class of shareholders for each case. (Round your answers to 2 decimal places.)
Case A Case B Case C Preferred Common Total Case A Case B Case C Preferred Common
Answer & Explanation
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