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2 March, 00:54

Splish Brothers Inc. has 9300 shares of 4%, $50 par value, cumulative preferred stock and 186000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2016. The board of directors declared and paid a $12900 dividend in 2016. In 2017, $64500 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2017?

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  1. 2 March, 01:19
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    The dividends received by the preferred stockholders in 2017 is $24,300

    Explanation:

    The computation of the preferred stockholder dividend is shown below:

    = Yearly dividend - dividend paid in 2016

    where,

    Yearly dividend = Number of shares * par value per share * rate

    = 9,300 shares * $50 * 4%

    = $18,600

    And, the 2016 dividend is $12,900

    Now put these values to the above formula

    So, the value would equal to

    = $18,600 - $12,900

    = $5,700

    So, the total dividend would be

    = Year end dividend + last year dividend

    = $18,600 + $5,700

    = $24,300

    Out of the $64,500, the $24,300 will be distributed to the preference shareholders and the remaining amount $402,00 would be distributed to the common stockholders
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