QuestionSlater Lamp Manufacturing has preferred stock with a \$80 par value and an 11% annual dividend.
a. Find the annual and quarterly dividend amounts. b. For noncumulative stock, how much is owed after 3 missed quarters? c. For cumulative stock, how much is owed after 3 missed quarters?

Studdy Solution
Calculate the dividend to be paid in the current quarter.
$$Dividend\, to\, be\, paid = \$2.2 +3 \\times \$2.2 = \$8.8$$a. The annual dollar dividend is $8.8 and the quarterly dividend is$2.2. b. If the preferred stock is noncumulative, $2.2 must be paid to preferred stockholders in the current quarter before dividends are paid to common stockholders. c. If the preferred stock is cumulative,$8.8 must be paid to preferred stockholders in the current quarter before dividends are paid to common stockholders.