Dividend Preferences Preferred Stock
Case #2 Assumptions
Dividend declared $80,000, no arrearage, P/S fully participating.
Distribution of dividend: to P/S to C/S Balance
P/S $200,000 x .08 $16,000 $64,000
C/S $250,000 x .08 $20,000 $44,000 $44,000 x .44* $19,360
$44,000 x .56* $24,640 $ 0
Totals $35,360 $44,640
- * in the ratio of par :
P/S par $200,000/ $450,000 = 44%
C/S par $250,000/$450,000 = 56%