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The Marcel Company has not paid any dividends during its first three years of operation. However, after showing continued growth and profitability, the company
The Marcel Company has not paid any dividends during its first three years of operation. However, after showing continued growth and profitability, the company declared a dividend to be paid at the end of year four. The total amount of the dividend was $63,500. Marcel Company has the following capital structure: 5% Cumulative Preferred Stock, $100 par value, 2,000 shares issued and outstanding 7% Non-cumulative Preferred Stock, $50 par value, 1,000 shares issued and outstanding Common Stock, $10 par value, 12,000 shares, issued and outstanding REQUIRED: Determine how much of the $63,500 dividend in Year 4 is to be properly allocated to each group of stockholders above. Please, show all calculations.
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