Calculate the annual cash dividends required to be paid for each of the following preferred stock issues: Required:
a. $3.30 cumulative preferred, no par value; 210,000 shares authorized, 146,000 shares issued. (The treasury stock caption of the stockholders' equity section of the balance sheet indicates that 40,653 shares of this preferred stock issue are owned by the company.) (Round your answer to 2 decimal places.)
b. 5%, $40 par value preferred, 293,000 shares authorized, 165,000 shares issued, and 72,725 shares outstanding. (Round your answer to 2 decimal places.)
c. 12.2% cumulative preferred, $100 stated value, $108 liquidating value; 81,000 shares authorized, 42,000 shares issued, 26,000 shares outstanding.

Annual Cash Dividends

a. = $347,645.10

b. = $145,450

c. = $317,200

Explanation:

a) Data and Calculations:

1. $3.30 Cumulative Preferred Stock:

Authorized shares = 210,000

Issued shares =        146,000

Treasury shares =     40,653

Outstanding shares 105,347

Cash dividend = $347,645.10 ($3.30 * 105,347)

2. 5% Preferred Stock, $40 par value:

Authorized shares = 293,000

Issued shares =         165,000

Outstanding shares   72,725 * $40 = $2,909,000

Cash dividend = $145,450 ($2,909,000 * 5%)

3. 12.2% cumulative preferred, $100 stated value, $108 liquidating value:

Authorized shares =   81,000

Issued shares =         42,000

Outstanding shares  26,000 * $100 = $2,600,000

Cash dividend = $317,200 ($2,600,000 * 12.2%)

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