SLACK TECHNOLOGIES 40 Point Problem Equity Portion of Balance Sheet Common Stock 5,000,000 shares authorized, 1,500,000 issued $180,000 $15,000,000 $303,600 Capital in excess of par value Treasury Stock on Common 30,000 shares 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 Retained Earnings $875,000 $20,202,021 Paragraph Styles SLACK TECHNOLOGIES 40 Point Problem Equity Portion of Balance Sheet Answers: 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 - 52 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 - 56,000,000 - 5950,000 -S5,050,000 Ans. Prefere divident for cunt war on RI 5.What was the initial stock price per share of the Preferred Stock? 6.Using your answer to question one what is the payout rate per share for the preferred stock