Calculate the Cash Dividends Required to Be Paid for Each

question 21

Essay

Calculate the cash dividends required to be paid for each of the following preferred stock issuances:
(a.) The semiannual dividend on 11.5% cumulative preferred, $100 par value;
6,000 shares authorized, issued, and outstanding.(b.) The total dividends owed to preferred shareholders on $1.50 annual cumulative preferred, 100,000 shares authorized, 85,000 shares issued, and 81,350 shares outstanding. The company did not pay dividends during the prior two years or during the current year.(c.) The quarterly dividend on 9.6% cumulative preferred, $70 stated value, $72 liquidating value, 20,000 shares authorized, 15,000 shares issued and outstanding. No dividends in arrears.

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Definitions:

Equilibrium Price

The value where the supplied quantity of a product equals the demanded quantity of that product.

Equilibrium Quantity

Supply and demand volume of goods or services at the price where equilibrium is achieved.

Market Price

The current price at which a good or service can be bought or sold in a marketplace, determined by supply and demand forces.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market equilibrium.