Predators Inc. has the following shares outstanding:

40,000, $ 0.80, no par value preferred shares $ 400,000

60,000 no par value common shares $ 600,000

All shares were sold for $ 10 each.

Dividends were last paid on December 31, 2017. It is now December 31, 2020, and the board of directors wants to distribute $ 204,000 in dividends.

Instructions

Calculate how much the preferred and common shareholders will receive under each of the following assumptions:

1. The preferred is noncumulative and non-participating. (2 marks)
2. The preferred is cumulative and non-participating. (3 marks)
3. The preferred is cumulative and fully participating. (5 marks)
4. The preferred is cumulative and participating up to 12% total. (6 marks)