Problem 18-9 (Algo) Effect of preferred stock characteristics on dividends [LO18-7]

The shareholders equity of Kramer Industries includes the data shown below. During 2022, cash dividends of $200 million were declared. Dividends were not declared in 2020 or 2021.

	($ in millions)
Common stock	$	220
Paid-in capitalexcess of par, common		1,100
Preferred stock, 9%, nonparticipating		100
Paid-in capitalexcess of par, preferred		390

Required: Determine the amount of dividends payable to preferred shareholders and to common shareholders under each of the following two assumptions regarding the characteristics of the preferred stock. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Assumption A The preferred stock is noncumulative. Assumption B The preferred stock is cumulative.