As head of Adita Incorporated, potential investors are asking questions about the companys 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.

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 Aditas preferred stock over its common stock?

Cash Dividends Distributed by Year $400,000 Number of Shares $360,000 $350,000 Preferred Stock 10,000 shares $300,000 $250,000 $210,000 $200,000 Common Stock 180,000 shares $150,000 $100,000 Preferred Stock Dividend Rate Preferred Stock 6% Par Value Per Share $50,000 $25,000 $30,000 Common Stock $0.01 SO Preferred Stock $20.00 Year 1 Year 2 Year 3 Year 4 Common Stock Share Price $25 $25 $20 $20 sig $15 siy $10 $5 $0 Year 1 Year 2 Year 3 Year 4 *+ableau