Question

Sandpiper Company ha 25,000 hare of cumulative preferred 1% tock, $150 par and 50,000 hare of $5 par common tock. The following amount were ditributed a dividend:

20Y1 $75,000
20Y2 15,000
20Y3 112,500
Determine the dividend per hare for preferred and common tock for each year. Round all anwer to two decimal place

Answer 1

$22500 is interest rate of common tock for each year.

What is an explanation of the interest rate?

An interest rate informs you of how much borrowing will cost you and how much saving will pay off.

                      Therefore, the interest rate is the amount you pay for borrowing money and is expressed as a percentage of the entire loan amount if you are a borrower.

Amount distributed as dividends = $15000

                 Total Preferred dividend to be paid  = $37500

       But Total Preferred dividend paid/avaiable = $15000

                              dividend per share(P.S)   = $0.60    **(15000 / 25000shares)

    Since the preferred stock cumulative dividend to be paid in Next year due to less payment in current year would be = $22500  or $0.90 per share        

                                      Remaining dividend  = 0

                       Equity dividend per share  = 0

Learn more about interest rate.

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