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Homework answers / question archive / The shareholders’ equity of WBL Industries includes the items shown below

The shareholders’ equity of WBL Industries includes the items shown below

Accounting

The shareholders’ equity of WBL Industries includes the items shown below. The board of directors of WBL declared cash dividends of $6 million, $14 million, and $160 million in its first three years of operation—2016, 2017, and 2018, respectively.

  ($ in millions)
  Common stock $ 110  
  Paid-in capital—excess of par, common   930  
  Preferred stock, 5%   220  
  Paid-in capital—excess of par, preferred   650  
Required:

Determine the amount of dividends to be paid to preferred and common shareholders in each of the three years, assuming that the preferred stock is cumulative and nonparticipating. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

 
 
  Par Value Preferred Stock Dividend Rate Annual Preferred Dividend  
Annual Preferred Dividend: $220 5.0% $11  
  Total Cash Dividend Paid Paid to Preferred Paid to Common Dividends in Arrears at year-end
2016 11 6 0 6
2017 11 14 0 17
2018 11 28 132 0
Total $33 $48 $132

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