Q 11.34: In 2020, First Inc. issued 12,000 shares of 8%, $60 par-value preferred stock with a cumulative-dividend feature. In 2020, the firm paid total dividends of $30,000, and in 2021, it paid total dividends of $45,000. If First declares $180,000 in total dividends for 2022, what amount will be available for its common stockholders?

Question

Tripp Simpson

Business

16 October, 21:16

Q 11.34: In 2020, First Inc. issued 12,000 shares of 8%, $60 par-value preferred stock with a cumulative-dividend feature. In 2020, the firm paid total dividends of $30,000, and in 2021, it paid total dividends of $45,000. If First declares $180,000 in total dividends for 2022, what amount will be available for its common stockholders?

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Brent · Answer 1

amount will be available for its common stockholders is $82,200

Explanation:

Dividend paid in 2020 is $30,000

Dividend for preferred stock holder in 2020 is = 12,000 * 60 * 8% = $57,600

Dividend accumulated for the next year is = 57600 - 30000 = $27,600

Dividend paid in 2021 is $45,000

from 57600, company paid 27600 and tjis year dividend as $17400

so total $45000 is paid

Balance unpaid dividend is accumulated = $57,600 - $17,400 = $40,200

in 2022, Total dividend is $180,000

Dividend payable to preferred stock holder in 2020 = $57,600

so total amount allotted to preferred stock holder is = 57600+40200 = $97800

we know total dividend paid in 2022 is $180,000

so dividend payable to common stockholders is = 180000 - 97800 = $82,200