Question: Abracadabra company has the following stocks issued and outstanding when the board of directors declared a $200,000 dividend.
Preferred stock: 18,000 shares issued and outstanding, 6% $30 per value
Common stock: 110,000 shares issued and outstanding, $10 par value
Determine the amount of dividends each class of stock will receive given the following assumptions:
Preferred stock is non-cumulative
Preferred stock is cumulative (two years in arrears)
Preferred stock is cumulative (one year in arrears)