Question
Ritz Company had the following stock outstanding and Retained Earnings at December 31, 2015: Common stock (par $1; outstanding, 480,000 shares) $ 480,000 Preferred stock,
Ritz Company had the following stock outstanding and Retained Earnings at December 31, 2015: |
Common stock (par $1; outstanding, 480,000 shares) | $ | 480,000 |
Preferred stock, 8% (par $10; outstanding, 20,800 shares) | 208,000 | |
Retained earnings | 898,000 | |
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On December 31, 2015, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2013 or 2014. |
Three independent cases are assumed: |
Case A: | The preferred stock is noncumulative; the total amount of 2015 dividends would be $28,000. |
Case B: | The preferred stock is cumulative; the total amount of 2015 dividends would be $28,000. Dividends were not in arrears prior to 2013. |
Case C: | Same as Case B, except the amount is $73,000. |
Required: | |||||||||||||||||||||||||||||
1-a. | Compute the amount of dividends in total payable to each class of stockholders if dividends were declared as described in each case.
Compute the amount of dividends per share payable to each class of stockholders if dividends were declared as described in each case. (Round your answers to 2 decimal places.)
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