LO$11-4,11-6,11-8$

Comparing Stock and Cash Dividends $($P$11-8)$

Kainen Company reported the following information at the end of the year:

The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared

during the previous two years. Assume the three cases below are independent of each other.

Case A: The preferred stock is noncumulative; the total amount of all dividends is $$25\mathrm{.}000.$

Case B: The preferred stock is cumulative; the total amount of all dividends is $$25,000.$

Case C: The preferred stock is cumulative; the total amount of all dividends is $$75,000.$

Required:

Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. Show

computations.

Assume Kainen Company issued a $40$ percent common stock dividend on the outstanding shares when the market value per share

was $$50.$ Fill in the table below to show how this stock dividend would compare to Case $C.$