Acc Quiz 4 - ACC 326 Fall 2004 Quiz #5 11/2/2004 Name: `...

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ACC 326 Name: ` Key Fall 2004 Quiz #5 11/2/2004 Class Time: Topics covered Types of dividends Cash Property Liquidating Stock dividends Stock splits Preferred stock characteristics and dividend allocation between preferred and common Convertible securities Convertible bonds Convertible preferred stock Stock warrants Stock options 1. Ultra Inc., has $80,000 available to pay dividends. It has 2,000 shares of 10%, $100 par value preferred stock and 30,000 shares of $10 par common stock outstanding. The preferred stock is selling for $125 per share and the common stock is selling for $20 per share. Compute the amount of dividends to be paid to each class of shareholder under each of the following independent assumptions: a. Preferred stock is non-participating and cumulative. Preferred dividends are two years in arrears as of the beginning of the current year. PS CS Dividends in arrears (20,000 per year *2 years) 40,000 Current year 20,000 10%*$10*30,000 20,000 60,000 20,000
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Participation (on total par values) PS (80,000-200,000/500,000 b. Preferred stock is fully participating and cumulative. Preferred dividends are one year in arrears as of the beginning of the current year. PS
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Acc Quiz 4 - ACC 326 Fall 2004 Quiz #5 11/2/2004 Name: `...

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