Lost Dutchman Silver Mining Company has 200,000 shares of $7 cumulative preferred stock outstanding, $100 par value.

Question:

Lost Dutchman Silver Mining Company has 200,000 shares of $7 cumulative preferred stock outstanding, $100 par value. The preferred stock has a participating feature. If dividends on the exceed $1 per share, preferred stockholders receive additional dividends per share equal to one-half of the excess. In other words, if the were $2, preferred stockholders would receive an additional of $0.50. The company has 1 million shares of outstanding. What would dividends per share be on the preferred stock and on the if earnings available for dividends in three successive years were
(a) $1,000,000, $600,000, and $3,000,000?
(b) $2,000,000, $2,400,000, and $4,600,000?
(c) $1,000,000, $2,500,000, and $5,700,000? (Assume that all of the available earnings are paid in dividends, but nothing more is paid.)
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...