Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ozark Distributing Company is primarily engaged in the wholesale distribution of consumer products in the Ozark Mountain regions. The following disclosure note appeared in the

Ozark Distributing Company is primarily engaged in the wholesale distribution of consumer products in the Ozark Mountain regions. The following disclosure note appeared in the company's 2021 annual report: Note 5. Convertible Preferred Stock (in part): The Company has the following Convertible Preferred Stock outstanding as of September 2021: Date of issuances Optionally redeemable beginning: Par value (gross proceeds): Number of shares: June 17, 2018 June 18, 2020 $2,500,000 100,000 Liquidation preference per share: $ 25.00 30.31 Number of common shares in which to be convertedi Dividend rater 82,481 6.7851 Conversion price per share The Preferred Stock is convertible at any time by the holders into a number of shares of Ozark's common stock equal to the number of preferred shares being converted times a fraction equal to $25.00 divided by the conversion price. The conversion prices for the Preferred Stock are subject to customary adjustments in the event of stock splits, stock dividends and certain other distributions on the Common Stock. Cumulative dividends for the Preferred Stock are payable in arrears, when, as, and if declared by the Board of Directors, on March 31, June 30, September 30, and December 31 of each year. The Preferred Stock is optionally redeemable by the Company beginning on various dates, as listed above, at redemption prices equal to 112% of the liquidation preference. The redemption prices decrease 1% annually thereafter until the redemption price equals the liquidation preference, after which date it remains the liquidation preference. Required: 1. What amount of dividends is paid annually to a preferred shareholder owning 100 shares of the Series A preferred stock? 2. If dividends are not paid in 2022 and 2023, but are paid in 2024, what amount of dividends will the shareholder receive? 3. If the investor chooses to convert the shares in 2022, how many shares of common stock will the investor receive for his/her 100 shares? 4. If Ozark chooses to redeem the shares on June 18, 2022, what amount will the investor be paid for his/her 100 shares? Complete thie nuection hu enterinn vnur aneware in the tahe holow

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Construction 17 Corporate Ifrs Gaap Engineering Technologies No 10 501 11 000 Of 111 111 Laws

Authors: Tim Asikin, Steve Asikin

1st Edition

1078350590, 978-1078350594

More Books

Students also viewed these Accounting questions