Question

Beagle Corporation has 18,000 shares of $10 par common stock outstanding and 18,500 shares of $100 par, 6.75% cumulative, nonparticipating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $470,000 dividend will be paid. What are the dividends per share payable to preferred and common, respectively?

Answer 1

Common Stockholders = $5.30 per share

Preferred Stockholders Payable = $20.25 per share

Step-by-step explanation:

Previous Years Dividends distribution - Year 1

Common Stockholders = $0

Preferred Stockholders Payable = 18,500 x $100 x 6.75% = $124,875.00

Previous Years Dividends distribution - Year 2

Common Stockholders = $0

Preferred Stockholders Payable = 18,500 x $100 x 6.75% = $124,875.00 ($249,750 -cumulative)

Previous Years Dividends distribution - Current Year

Common Stockholders = $95,375

Preferred Stockholders Payable = 18,500 x $100 x 6.75% = $124,875.00 ($374,625 -cumulative)

dividends per share payable calculation

Common Stockholders = $95,375 / 18,000 shares = $5.30 per share

Preferred Stockholders Payable = $374,625 / 18,500 shares = $20.25 per share