Dividends on Preferred Shares

question 98

Essay

Dividends on preferred shares
Lithuania Corp. has been authorized to issue 20,000 no par value, $ 6, cumulative and fully participating preferred shares and 100,000 no par value common shares. The account balances at December 31, 2020 are: No dividends have been paid since December 31, 2016. The corporation now desires to pay $ 280,000 in dividends.
Instructions
Calculate how much the preferred and common shareholders will receive.

---

Definitions:

Personal Property Security Act

Legislation that provides a legal framework for the creation and registration of security interests in personal property (assets other than real estate) to secure payment or performance of an obligation.

Guaranteed

A promise or assurance, often backed by an entity or document, that certain conditions will be fulfilled or met.

Security Interest

A legal claim or right granted over an asset to secure the performance of an obligation, typically repayment of a loan.

Overages

Extra charges incurred when a project goes over its budget, often applied in construction, film production, or retail leasing contexts.