Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 7

Preferred stock-calculate dividend amounts Dedrick, Inc., did not pay dividends in 2015 or 2016, even though 70,000 shares of its 8.5%, $50 par value cumulative preferred stock were outstanding during those years. The company has 500,000 shares of $2 par value common stock outstanding.
Required:
a. Calculate the annual dividend per share obligation on the preferred stock.
b. Calculate the amount that would be received by an investor who has owned 1,400 shares of preferred stock and 16,000 shares of common stock since 2014 if a $0.60 per share dividend on the common stock is paid at the end of 2017.