Business, 23.05.2020 21:02 jscout2468

Chicago Company reported the following information at the end of the current year:

Common stock ( $10 par value; 48,000 shares outstanding) $ 480,000
Preferred stock, 15% ( $15 par value; 9,500 shares outstanding) 142,500
Retained earnings 288,500

The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared during the previous two years. Assume the three cases below are independent of each other.

Case A: The preferred stock is noncumulative; the total amount of all dividends is $38,500.
Case B: The preferred stock is cumulative; the total amount of all dividends is $64,125.
Case C: The preferred stock is cumulative; the total amount of all dividends is $91,500.

Required

1. Compute the amount of dividends, in total and per share, that would be payable to stockholders for each case. Show computations.

2. Assume Chicago Company issued a 30 percent common stock dividend on the outstanding when the market value per share was $24. Fill in the table below to show how this stock divident would compare to Case

AMOUNT OF DOLLAR INCREASE (DECREASE)
Item Cash Dividend-Case C Stock Dividend

Assets
Liabilities
Stockholders' equity

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Chicago Company reported the following information at the end of the current year:

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