Hallery Corporation has 12000 shares of 4 5 par cumulative p

Hallery Corporation has 12,000 shares of 4%, $5 par cumulative preferred stock and 51,000 shares of common stock outstanding. Hallery declared no dividends in 2017 and had no dividends in arrears prior to 2017. In 2018, Hallery declares a total dividend of S52.000. How much or the dividends go to the common stockholders? O A. $49,600 O B. $52,000 OC. $47.200 O D. None; it all goes to preferred stockholders

Solution

Answer

A

No. of preferred stock share

12000

B

par value per share

$                                                    5.00

C=AxB

Total value

$                                         60,000.00

D

Dividend rate

4%

E=C x D

2017 dividend in arrear

$                                           2,400.00

F=C x D

2018 dividend

$                                           2,400.00

G = E+F

Total preferred stock dividend to be paid

$                                           4,800.00

H

Total dividend declared

$                                         52,000.00

I = H - G

Dividend for Common Stock

$                                         47,200.00

A	No. of preferred stock share	12000
B	par value per share	$                                                    5.00
C=AxB	Total value	$                                         60,000.00
D	Dividend rate	4%
E=C x D	2017 dividend in arrear	$                                           2,400.00
F=C x D	2018 dividend	$                                           2,400.00
G = E+F	Total preferred stock dividend to be paid	$                                           4,800.00
H	Total dividend declared	$                                         52,000.00
I = H - G	Dividend for Common Stock	$                                         47,200.00