Chapter-11BarryBus21

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Unformatted text preview: 1,000,000 $ 0.01 $ 10,000 30,000 640,000 $ 680,000 27 28 29 Preferred Stock Dividends In addition to its common stock, National Beverage has $1 par value cumulative preferred stock with a 7 percent dividend rate. Assume 100,000 of these shares are outstanding, one year of dividends are in arrears, and the board of directors just declared total dividends of $400,000. How much will each class of stock receive? 30 Preferred Stock Dividends Total dividend declared Preferred stock (cumulative) In Arrears ($1 par 7% 100,000 shares) Current Yr. ($1 par 7% 100,000 shares) Remainder Common stock Remainder $ $ 7,000 7,000 $ $ 400,000 14,000 386,000 386,000 - 31 32 33 34 Price/Earnings (P/E) Ratio The P/E ratio is a measure of the value that investors place on a company's common stock. P/E = Current Stock Price (per share) Earnings Per Share (annual) National Beverage's stock price was $7.74...
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