Dividend Preferences Preferred Stock
Case #4 Assumptions
Dividend declared $100,000
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) $68,000
C/S $250,000 x .08 $20,000 48,000
$48,000 x .44* 8,000
$44,000 x .56* 40,000 0
Totals $40,000 $60,000
* in the ratio of par (please see previous slide).