Unformatted text preview: dends: Accounting for Dividends: Cash Dividends Hewitt declares and pays a cash dividend of $10 million: Preferred and Common Dividends
Preferred and Common Dividends Assume that a company has 15,000 shares of $50 par value, 8% preferred stock outstanding and 50,000 shares of $5 par value common stock outstanding.
During its first three years in business, the company declares $20,000 dividends in the first year, $260,000 of dividends in the second year, and $60,000 of dividends in the third year. If the preferred stock is cumulative, the total amount of dividends paid to each class of stock in each of the three years follows: Preferred and Common Dividends Preferred and Common Dividends (cont’d) Accounting for Dividends: Accounting for Dividends: Stock Dividends...
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