Michelangelo Inc., a software development firm, has stock outstanding as follows: 20,000 shares of cumulative 1%, preferred
Question:
20,000 shares of cumulative 1%, preferred stock of $25 par, and 25,000 shares of $100 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $3,000; second year, $4,000; third year, $30,000; fourth year, $80,000. Calculate the dividends per share on each class of stock for each of the four years.
Step by Step Answer:
Amount distributed Preferred dividend 20000 share...View the full answer
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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