SLACK TECHNOLOGIES 40 Point Problem Equity Portion of Balance Sheet Common Stock 5,000,000 shares authorized, 1,500,000 issued $180,000 Capital in excess of par value $15,000,000 Treasury Stock on Common 30,000 shares $303,600 Cumulative Preferred Stock 2,000,000 shares authorized, 500,000 issued $2 Dividend $10 par, $5,000,000 Capital Surplus [Excess of paid in Capital] $12,500,000 Treasury Stock on Preferred Stock 25,000 shares $875,000 Retained Earnings $20,202,021 8. 9. Answers: SLACK TECHNOLOGIES 40 Point Problem Equity Portion of Balance Sheet Ans. 1. Whenever cash dividend is declared, preference shareholders are paid first and in case of cumulative preference shares, previously unpaid preferred dividend (for a year when dividend was not declared) is also paid, before any dividend payment to common shareholders. The balance left after payment to preference shareholders is dividend paid to common shareholders. Total cash dividend - $6,000,000 Preferred dividend-$2 per share No. of outstanding preference shares No. Of outstanding preference shares - No. of issued shares - Treasury stock on preferred shares -500,000 shares-25,000 shares -475,000 shares So, preferred dividend-$2 475,000 shares -$950,000 Common stock dividend - Total cash dividend- Preferred dividend -$6,000,000-$950,000 - $5,050,000 Homp For 7. Using your answer to question one what is the payout rate per share for common stock? 9. Could Slack issue a 3 to 1 stock split on common? Explain. 13. What is Slack's total equity per the balance sheet listed above