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The records of Hoffman Company reflected the following balances in the stockholders' equity accounts at December 31, 2015: On January 1, 2016, the board of
The records of Hoffman Company reflected the following balances in the stockholders' equity accounts at December 31, 2015: On January 1, 2016, the board of directors was considenng the distribution of a $63,700 cash dividend. No dividends were pad during 2014 and 2015. 1. Determine the total and per-share amounts that would be paid to the common stockholders and to the preferred stockholders under two independent assumptions: a. the preferred stock is noncumulative. b. the preferred stock is cumulative. 2. Why were the dividends per share of common stock less for the cumulative preferred stock than the noncumulative preferred stock? the dividends in arrears on the referred stock had to be fulfilled before dividends could be paid for the current year. the dividend rate for preferred stockholders was increased. 3. What factors would cause a more favorable cvidend for the common stockholders
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