Assume that Eagle Corporation has issued 10%, participating cumulative preferred stock with a total par value of

Question:

Assume that Eagle Corporation has issued 10%, participating cumulative preferred stock with a total par value of $22,000 and common stock with a total par value of $44,000. Therefore, the preferred stock par value is 1/3 and the common stock par value is 2/3 of the total par value. The corporation intends to distribute cash dividends of $10,200, and there are no dividends in arrears. What is the dividend distribution to each class of stock if the preferred stock is fully participating?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...