Fritz Corporation Has 800,000 Shares of Preferred Stock and 1,800,000

question 59

Essay

Fritz Corporation has 800,000 shares of preferred stock and 1,800,000 shares of common stock.The cumulative preferred stock has a stated dividend of $2.50 per share.Under normal conditions,Kreisler pays out 30% of earnings available to common shareholders,however,because of a severe recession,Fritz retained all earnings last year.This year,Fritz earned net income of $6.4 million.

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Definitions:

Reasonable Means

Methods or actions that are considered fair, sensible, and appropriate given the circumstances.

UCC

Stands for the Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States.

Communication

The process of exchanging information, ideas, thoughts, and feelings through spoken words, writing, signals, or behavior.

Mirror Image Rule

A principle in contract law that demands an acceptance must exactly match the terms of the offer for a valid contract to be formed.