Herr Corporation has 3,000 shares of 8%, $120 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $132,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios. 1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years 2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years. 3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years

1. $28,800

$103,200

2. $28,800

$103,200

3. $86,400

$45,600

Explanation:

1. The dividend paid to preferred stockholders = Shares × Par value × Percentage

= 3,000 shares × $120 × 8%

= $28,800

The dividend paid to Common stockholders = Cash dividend - Dividend paid to preferred stockholders

= $132,000 - $28,800

= $103,200

2. The dividend paid to preferred stockholders = Shares × Par value × Percentage

Note :- Because preferred stocks are non-cumulative in nature, the company is not allowed to pay last two years' dividends and preferred stocks are liable for payment only for the current year.

= 3,000 shares × $120 × 8%

= $28,800

The dividend paid to Common stockholders =  Cash dividend - Dividend paid to preferred stockholders

= $132,000 - $28,800

= $103,200

3. The dividend paid to preferred stockholders = Shares × Par value × Percentage × Number of years

Note: Since preferred stocks are cumulative in nature, the company is forced to pay last two years' dividends along with the current year's dividend.

= 3,000 shares × $120 × 8 % × 3 years

= $86,400

The dividend paid to Common stockholders = Cash dividend - Dividend paid to preferred stockholders

= $132,000 - $86,400

= $45,600

the correct option is c

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20