Solve Ch.10-1

Avant Garde Corporation has 175,000 shares of $1.50 preferred stock outstanding in addtion to its common stock. The $1.50 designation means that the preferred stockholders receive an annual cash dividend of $1.50 per share. In 2018, Avant Garde declares an annual dividond of $500,000. Tho allocation to proterred and common stocknoldors is: EEE (Click tho icon to viaw tho data.) Reed the requrements 1. How much in dividends must Ayant Garde declare each year before the common stockhokers receive any cash dividends for the year? 282,500 Avant Gardo must doclaro dividands of S receive any cash dvidends for the year eaach war befor, tho carnmon stockholders 2. Supposo Avant Gardo doc ares cash di donds of $350.000 for 2018. How much of tdridonos goos to pre erro shareholders? How much goos to common sharoholders? Class of Stock 2018 Dividends Preferred Common Tota Data Table Answer hese queslions aboul Avanl Garde's cash dividends. 1. How much in diidends must Avant Garde doclare cach ycar before the common stockholdors roccive any Preferred dividend (175,000 shares x 1.50 per share) Common dividend (remainder: $500,000 $262,500) Total dividend $262,500 237 500 $500,000 cash dividends for the year? Suppose Avani Gerde decleres cash dividends of $350,000 far 2018. How much of the dividends goes to prefered sharcholders? How much goos to common shareholders? 2. IsAvant Garde's preferred stock cumulative or noncumulative? How can you tell? 4. Avant Garde passed the preferred dividend in 2017 and 2018. Then in 2019. Avant Garde declares cash Print Done dvidends of $1,550,000. How much of the dividenkis goes to preterred shareholders? How much goes to Print Done