Dividing dividends between preferred and common stock
NORTHERN COMMUNICATIONS Stockholders’ Equity
Preferred stock, 6%, $11 par, 150,000 shares authorized
20,000 shares issued and outstanding
Common stock, $3 par, 575,000 shares authorized
400,000 shares issued and outstanding
Paid-in capital in excess of par—common
Total paid-in capital
Total stockholders’ equity
1.First, determine whether preferred stock is cumulative or noncumulative.
2.Compute the amount of dividends to preferred and to common for 2011 and 2012 if total dividends are $12,200 in 2011 and $55,000 in 2012.
3.What is the average price at which each preferred share sold for? What is the average price at which each common share sold for?