Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P11-8 (Algo) Comparing Stock and Cash Dividends LO11-4, 11-6, 11-8 Chicago Company reported the following information at the end of the current year: Common
P11-8 (Algo) Comparing Stock and Cash Dividends LO11-4, 11-6, 11-8 Chicago Company reported the following information at the end of the current year: Common stock ( $10 par value; 48,000 shares outstanding) $480,000 Preferred stock, 15% ( $15 par value; 9,500 142,500 shares outstanding) Retained earnings 288,500 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 $38,500. Case B: The preferred stock is cumulative; the total amount of all dividends is $64,125. Case C: The preferred stock is cumulative; the total amount of all dividends is $91,500. Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. (Round "Dividends per Share" to 2 decimal places.) Complete this question by entering your answers in the tabs below. Required Required 1 2 Assume Chicago Company issued a 30 percent common stock dividend on the outstanding shares when the market value per share was $24. Fill in the table below to show how this stock dividend would compare to Case C. (Leave no cells blank - be certain to enter "0" wherever required.) Item Assets AMOUNT OF DOLLAR INCREASE (DECREASE) Cash Dividend-Case C Stock Dividend Liabilities Stockholders' equity < Required 1 Required 2 > Show less
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started