Question
Cheyenne Corporation issued 180,000, $4.00 cumulative preferred shares to fund its first investment in wind generators. In its first year of operations, it paid $452,000
Cheyenne Corporation issued 180,000, $4.00 cumulative preferred shares to fund its first investment in wind generators. In its first year of operations, it paid $452,000 of dividends to its preferred shareholders. In its second year, the company paid dividends of $988,000 to its preferred shareholders.
a) What is the total annual preferred dividend supposed to be for the preferred shareholders?
b) Calculate any dividends in arrears in years 1 and 2.
c) If the preferred shares were noncumulative rather than cumulative, how much dividend would the company likely have paid its preferred shareholders in year 2?(Round the amount per share to 2 decimal places, e.g. 12.50.)
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