Devons Company Has 24,000 Shares of $1 Par Common Stock

question 167

Essay

Devons Company has 24,000 shares of $1 par common stock issued and outstanding. The company also has 2,000 shares of $100 par 5% cumulative preferred stock outstanding. The company did not pay the preferred dividends in 2009 or 2010. What amount of dividends must the company pay the preferred shareholders in 2011 if they wish to pay the common stockholders a dividend?

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Definitions:

Behavior Modification Technique

Approaches used to change detrimental behaviors into more positive actions through reinforcement and other strategies.

Intrinsic Motivation

The drive to perform an activity for its inherent satisfaction rather than for some separable consequence.

Systematic Desensitization

A behavioral therapy technique used to reduce phobias and anxiety through gradual exposure to the feared object or situation combined with relaxation exercises.

Positive Reinforcement

A term from reinforcement theory, positive reinforcement refers to the situation in which a behavior is followed by positive consequences and thus is likely to be repeated.