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As head of Adita Inc., potential investors are asking questions about the company's dividend payment history. The investors are also curious how dividend payments differed
As head of Adita Inc., 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 Number of Shares $400,000 $350,000 Preferred Stock $300,000 $250,000 $200,000 Common Stock $ 150,000 Preferred Stock Dividend Rate $100,000 Preferred Stock 696 Par Value Per Share $50,000 Common Stock $0.01 $0 Preferred Stock $20.00 Year 1 Year 2 Year 3 Year 4 Common Stock Share Price Year 1 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. If Adita wanted to attract more investors to its preferred stock, which of the following features should it add? 3. Why might Adita want to issue preferred stock instead of common stock? 4. Why might an investor prefer Adita's preferred stock over its common stock? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 10 Required 2 Required 3 Required 4 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. (Round your "Dividend per Preferred Share" answer to 1 decimal place.) Par Value per Preferred Share Dividend Rate Dividend per Preferred Share Number of P referred Shares Preferred Dividend Annual Preferred Dividend: Paid to Preferred Paid to Common Dividends in Arrears at year-end Year 1 Year 2 Year 3 Year 4 Totals Total Cash Dividend Paid 25,000 30,000 210,000 360,000 $ 625,000 $ 0 $ 0 Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 Would potential investors favor noncumulative or cumulative preferred stock assuming they were priced the same? Would potential investors favor noncumulative or cumulative preferred stock assuming they were priced the same? Required 1B Required 2 > Cumulative preferred stock Investors would be indifferent Noncumulative preferred stock Complete this question by entering your answers in the tabs below. Required 14 Required 18 Required 10 Required 2 | Required 3 Required 4 If Adita wanted to attract more investors to its preferred stock, which of the following features should it add? If Adita wanted to attract more investors to its preferred stock, which of the following features should it add? Noncumulative preferred stock feature Par value preferred stock feature Participating preferred stock feature Weighted average preferred stock feature Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 Why might Adita want to issue preferred stock instead of common stock? Why might Adita want to issue preferred stock instead of common stock? As head of Adita Inc., 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 Number of Shares $400,000 $350,000 Preferred Stock $300,000 $250,000 $200,000 Common Stock $ 150,000 Preferred Stock Dividend Rate $100,000 Preferred Stock 696 Par Value Per Share $50,000 Common Stock $0.01 $0 Preferred Stock $20.00 Year 1 Year 2 Year 3 Year 4 Common Stock Share Price Year 1 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. If Adita wanted to attract more investors to its preferred stock, which of the following features should it add? 3. Why might Adita want to issue preferred stock instead of common stock? 4. Why might an investor prefer Adita's preferred stock over its common stock? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 10 Required 2 Required 3 Required 4 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. (Round your "Dividend per Preferred Share" answer to 1 decimal place.) Par Value per Preferred Share Dividend Rate Dividend per Preferred Share Number of P referred Shares Preferred Dividend Annual Preferred Dividend: Paid to Preferred Paid to Common Dividends in Arrears at year-end Year 1 Year 2 Year 3 Year 4 Totals Total Cash Dividend Paid 25,000 30,000 210,000 360,000 $ 625,000 $ 0 $ 0 Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 Would potential investors favor noncumulative or cumulative preferred stock assuming they were priced the same? Would potential investors favor noncumulative or cumulative preferred stock assuming they were priced the same? Required 1B Required 2 > Cumulative preferred stock Investors would be indifferent Noncumulative preferred stock Complete this question by entering your answers in the tabs below. Required 14 Required 18 Required 10 Required 2 | Required 3 Required 4 If Adita wanted to attract more investors to its preferred stock, which of the following features should it add? If Adita wanted to attract more investors to its preferred stock, which of the following features should it add? Noncumulative preferred stock feature Par value preferred stock feature Participating preferred stock feature Weighted average preferred stock feature Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 Why might Adita want to issue preferred stock instead of common stock? Why might Adita want to issue preferred stock instead of common stock?
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