DeMono Corporation had both common stock and preferred stock outstanding from 2011 through 2013. Information about each stock for the three years is as follows:

The company paid $35,000, $200,000, and $275,000 in dividends for 2011 through 2013, respectively. The market price per common share was $15 and $17 per share at the end of 2012 and 2013, respectively.

1. Determine the dividends per share and total dividends paid to the common and preferred stockholders each year.
2. Assuming that the preferred stock was noncumulative, repeat the computations per-formed in 1.
3. Calculate the 2012 and 2013 dividends yield for common stock using the dividends per share computed in 2. (Note: Round ratios to one decimal place.)
4. How are cumulative preferred stock and noncumulative preferred stock similar to long-term bonds? How do they differ from long-termbonds?

  • CreatedSeptember 10, 2014
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