A firm has 50 million common shares outstanding, on which it pays a quarterly dividend of $0 20 per share The firms capital structure also includes two million cumulative preferred shares with a $25 par value that yield 8 percent per year (or 2 percent per quarter) After making some bad loans in th...

As the preferred shares are cumulative all the missed dividends must be paid on them befo ...

A firm has 50 million common shares outstanding, on which it pays a quarterly dividend of $0.20

Question:

A firm has 50 million common shares outstanding, on which it pays a quarterly of $0.20 per share. The firm’s also includes two million cumulative preferred shares with a $25 that yield 8 percent per year (or 2 percent per quarter). After making some bad loans in the sub-prime mortgage market, the firm suffered a big loss, and suspended its payments on all forms of equity. Six months later, the company is once again in the black having earned $6 million (after tax), which it intends to pay as dividends. How much will the common shareholders receive per share?

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... 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,...