Question $7$

Rensing. Inc., has $$800,000$ of $4\%$ preferred stock and $$1,200,000$ of common stock

outstanding, each having a par value of $$10$ per share. No dividends have been paid or

declared during $2023$ and $2024.$ As of December $31,2025,$ it is desired to distribute

$$270,000$ in dividends.

Instructions:

How much will the preferred and common stockholders receive under each of the following

assumptions:

The preferred is noncumulative and nonparticipating.

The preferred is cumulative and nonparticipating.

The preferred is noncumulative and fully participating.

The preferred is cumulative and fully participating.

The preferred is cumulative and participating to $7\%$ total.

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