Question

what amount of dividends is paid annually to a preferred shareholder owning 200 shares of the series a preferred stock? if dividends are not paid in 2025 and 2026, but are paid in 2027, what amount of dividends will the shareholder receive? if the investor chooses to convert the shares in 2025, how many shares of common stock will the investor receive for their 200 shares? if ozark chooses to redeem the shares on june 18, 2025, what amount will the investor be paid for their 200 shares?

Answer 1

Without specific dividend rates or terms, the annual dividend amount cannot be provided. Conversion of preferred shares to common stock depends on the conversion ratio, and redemption amounts are based on the redemption price stipulated by the preferred stock's terms.

Step-by-step explanation:

To determine the amount of dividends paid annually to a preferred shareholder owning 200 shares of Series A preferred stock, you would need the specific dividend rate per share. Since the scenario does not provide this rate, a general answer cannot be given without more information. If dividends were skipped in 2025 and 2026 but are paid in 2027, the shareholder might receive the back dividends if the preferred stock has a cumulative dividend feature, which guarantees payment of missed dividends; otherwise, they would just receive the dividend for 2027.

The number of shares of common stock the investor would receive upon conversion of their 200 preferred shares in 2025 depends on the conversion ratio set by the company. This ratio should be detailed in the terms of the preferred stock issuance.

If Ozark were to redeem the shares on June 18, 2025, then the amount the investor would be paid for their 200 shares would be calculated based on the redemption price specified by the terms of the preferred stock. This price is typically at a premium to the face value of the shares.