Andrews Company has $95,000 available to pay dividends. It has 2,000 shares of 10%, $100 par, preferred stock and 20,000 shares of $10 par common stock outstanding. The preferred stock is selling for $125 per share, and the common stock is selling for $ 20 per share. Preferred stock is fully participating and cumulative. Preferred dividends are 1 year in arrears at the beginning of the year. I am stuck on how to find out the Remaineder Shared of part C of this problem. A corporation's shareholders are not legally entitled to share in dividends unless its board of directors has declared these dividends. Ifdividends are not declared in a particular year, a holder of noncumulative preferred stock will never be paid the dividend for that year. Mostpreferred stock is cumulative preferred stock. If a corporation fails to declare a dividend on cumulative preferred stock at the stated rate onthe usual dividend date, the amount becomes dividends in arrears. Dividends in arrears accumulate from period to period. A corporationcannot pay common shareholders any dividends until it has paid the preferred dividends in arrears.c. Preferred stock is fully participating and cumulative. Preferred dividends are 1 year in arrears at the beginning of the year.Andrews CompanySchedule of dividends to be paidPreferredCommonDividends in arrears20,000Current preferred dividends20,000Common proportional share20,000Remainder sharedTotal2. For 1(a), compute the dividend yield on the preferred stock and the common stock. If required, round your answers to one decimal place.Dividend yieldPreferred stockCommon stock%

Cumulative dividends: This is a preferential right a preferred shareholder must receive current…

Answered: A corporation's shareholders are not…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Andrews Company has $95,000 available to pay dividends. It has 2,000 shares of 10%, $100 par, preferred stock and 20,000 shares of $10 par common stock outstanding. The preferred stock is selling for $125 per share, and the common stock is selling for $ 20 per share. Preferred stock is fully participating and cumulative. Preferred dividends are 1 year in arrears at the beginning of the year. I am stuck on how to find out the Remaineder Shared of part C of this problem.

A corporation's shareholders are not legally entitled to share in dividends unless its board of directors has declared these dividends. If
dividends are not declared in a particular year, a holder of noncumulative preferred stock will never be paid the dividend for that year. Most
preferred stock is cumulative preferred stock. If a corporation fails to declare a dividend on cumulative preferred stock at the stated rate on
the usual dividend date, the amount becomes dividends in arrears. Dividends in arrears accumulate from period to period. A corporation
cannot pay common shareholders any dividends until it has paid the preferred dividends in arrears.
c. Preferred stock is fully participating and cumulative. Preferred dividends are 1 year in arrears at the beginning of the year.
Andrews Company
Schedule of dividends to be paid
Preferred
Common
Dividends in arrears
20,000
Current preferred dividends
20,000
Common proportional share
20,000
Remainder shared
Total
2. For 1(a), compute the dividend yield on the preferred stock and the common stock. If required, round your answers to one decimal place.
Dividend yield
Preferred stock
Common stock
%

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