Dividend Preferences Preferred Stock
Case #3 Assumptions
Dividend declared $60,000
One year arrearage, P/S partially participating to 12%
Distribution of dividend: to P/S to C/S Balance
P/S $200,000 x .16 $32,000 (two years) $28,000
C/S $250,000 x .08 $20,000 $ 8,000
$8,000 x .44* 3,520
$8,000 x .56* 4,480 0
Totals $35,520 $24,480
* in the ratio of par (please see next slide)