Brief Exercise 15-15

Nottebart Corporation has outstanding 11,900 shares of $109 par value, 6% preferred stock and 62,200 shares of $13 par value common stock. The preferred stock was issued in January 2014, and no dividends were declared in 2014 or 2015. In 2016, Nottebart declares a cash dividend of $328,000.

(a) Assume that the preferred are noncumulative. How much dividend will the preferred stockholders receive? How much dividend will the common stockholders receive?

(b) Assume that the preferred are cumulative. How much dividend will the preferred stockholders receive? How much dividend will the common stockholders receive?