Stockdividend stockdividende 288000 commonstockse

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Unformatted text preview: end, Royal Company has capitalized part of Retained Earnings, which means that it will never be available for cash dividends. Alternatively, with a cash dividend you would receive something of value, namely cash, while still maintaining a 3% ownership interest in the company. The trade­off, however, is that the value of the company would decrease by the value of the cash dividend. P12–5 a. Each preferred stockholder is entitled to 10% of the par value, or $5.00. Thus, the 15,000 preferred stockholders are entitled to a total of $75,000 in any particular year. Year Total Dividends 2006 2007 2008 2009 2010 2011 2012 100,000 75,000 70,000 70,000 50,000 50,000 125,000 75,000 110,000 75,000 99,000 75,000 b. Year 2006 2007 2008 2009 2010 2011 2012 Preferred Dividends Common Dividends Preferred per Share $ 65,000 $65,000 $ Total Dividends 25,000 0 0 50,000 35,000 24,000 5.00 4.67 3.33 5.00 5.00 5.00 0 Common per Share $4.33 $0.00 0.50 0.00 0.00 1.00 0.70 0.48 Preferred Dividends $ 65,000 $4.33 100,000 75,000 70,000 50,000 Common Dividends Preferred per Share $65,000 (for 2006) $0.00 10,000 (for 2006) 15,000 (for 2007) 70,000 (for 2008) 0 5,000 (for 2008) 0 45,000 (for 2...
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