1.

Bill & Lisa Limited did not pay dividends on its 7.5%, $100 par value cumulative preferred stock during 2021 or 2022. Since 2015, 115,000 shares of this stock have been outstanding. Bill & Lisa Limited has been profitable in 2023 and is considering a cash dividend on its common stock that would be payable in December 2023.

Required:

Calculate the amount of dividends that would have to be paid on the preferred stock before a cash dividend could be paid to the common stockholders.

2.

Calculate the annual cash dividends required to be paid for each of the following preferred stock issues:

Required:

A. $3.80 cumulative preferred, no par value; 270,000 shares authorized, 121,000 shares issued. (The treasury stock caption of the stockholders' equity section of the balance sheet indicates that 41,143 shares of this preferred stock issue are owned by the company.)

Note: Round your answer to 2 decimal places.

B. 6%, $40 par value preferred, 230,000 shares authorized, 172,000 shares issued, and 73,520 shares outstanding.

Note: Round your answer to 2 decimal places.

C. 11.4% cumulative preferred, $90 stated value, $94 liquidating value; 87,000 shares authorized, 45,000 shares issued, 37,000 shares outstanding.