1 Tableau DA 11-3: Mini-Case, Comparing dividends on noncumulative and cumulative preferred stock LO C2 As head of Adita Incorporated, potential investors are asking questions about the company's dividend payment history. The investors are also curious how dividend payments differed for common and preferred shareholders. To help answer their questions, the following Tableau Dashboard is provided. Cash Dividends Distributed by Year $400,000 Number of Shares Ask $350,000 Print $300,000 derences $250,000 $200,000 $150,000 Preferred Stock Prev 1 of 1 Next > Common Stock 1 mok $25 $20 $15 $10 $5 $0 t oces Year 11 Year 2 Year 3 Year 4 Year 1 +ableau Common Stock Share Price Year 2 Year 3 Year 4 1a. Assume that preferred stock is noncumulative and calculate total dividends paid out to each class of shareholders for each of Years 1, 2, 3, and 4 and the years combined. 1b. Assume that preferred stock is cumulative and calculate total dividends paid out to each class of shareholders for each of Years 1, 2, 3, and 4 and the years combined. 1c. Would potential investors favor noncumulative or cumulative preferred stock assuming they were priced the same? 2. Why might Adita want to issue preferred stock instead of common stock? 3. Why might an investor prefer Adita's preferred stock over its common stock? Complete this question by entering your answers in the tabs below. 1 3. Why might an investor prefer Adita's preferred stock over its common stock? Complete this question by entering your answers in the tabs below. ints Required 1A Required 18 Required 1C Required 2 Required 3 eBook Assume that preferred stock is noncumulative and calculate total dividends paid out to each class of shareholders for each of Years 1, 2, 3, and 4 and the years combined. Par Value per Preferred Share Dividend Rate Dividend per Preferred Share Number of Preferred Preferred Dividend Shares Ask Annual Preferred Dividend: 20.00 6.0% $ 1.20 70,000 $ 84,000 Dividends in Total Cash Dividend Paid Paid to Preferred Paid to Common Print Arrears at year-end Year 1 $ 25,000 $ 25,000 $ Year 2 30,000 30,000 erences Year 3 210,000 Year 41 360,000 84,000 276,000 0 0 0 0 Totals $ 625,000 $ 139,000 $ 276,000 Prev 1 of 1 Next > Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 1C Required 2 Required 3 Dividend Rate Assume that preferred stock is cumulative and calculate total dividends paid out to each class of shareholders for each of Years 1, 2, 3, and 4 and the years combined. Par Value per Preferred Share Dividend per Preferred Share Number of Preferred Preferred Dividend Shares Annual Preferred Dividend: $ 20.00 Total Cash Dividend Paid Paid to Preferred 6.0% $ Paid to Common 1.20 70,000 $ 84,000 Dividends in Arrears at year-end Year 1 Year 2 es Year 3 Year 4 Totals $ $ 25,000 $ 25,000 30,000 30,000 210,000 360,000 625,000 $ 55,000 $ < Required 1A Required 1C > Prev 1 of 1 Next