Calculation of Preferred Dividends

23. Ivy has preferred stock selling for 98 percent of par that pays a 7 percent annual coupon. What would Ivy’s component cost of preferred stock ?

of dividends, and a required return of 10 per cent per annum. The value of each

= Par value of preferred shares issued / Par value per share of preferred shares

2. 2010 Payout = $3,600,000/$10,800,000 = 0.33 = 33% 2011 Dividends = (0.33)(2009 Net income) = (0.33)($14,400,000) = $4,800,000 (Note: If the payout ratio is rounded off to 33%, 2011 dividends are then calculated as $4,752,000.)

A company's board of directors votes to declare a cash dividend of $1.10 per share. The company has 22,000 shares authorized, 17,000 issued, and 16,500 shares outstanding. The total amount of the cash dividend is:

income is $26.03 for year 1. Similarly, the present value of the firm at time 1 is

Dividend per share ratio is the sum of all dividends a company pays out over a fiscal year divided by the number of outstanding shares. It is used to share the profit of the company with shareholders. If this share decreases, it needs reinvestment in the operation, debt reduction and poor earnings of the company. In this case, there was an increase in the year of 2015 in J.B Hunt. It is used to share a company's profits with its shareholders. The reason for decreasing the value in dividend per share refers to reinvestment in the operation of a company, poor earnings, and debt reduction.

7. A company pays $600,000 for 30% of the common stock of X, Inc. In the first year, X,

15. Gibraltar Corporation has 200,000 shares of 9%, $50 par value cumulative preferred stock authorized, 80,000 shares issued and 75,000 outstanding, as well as 300,000 shares of $10 par value common stock issued and outstanding. Dividends relative to the preferred stock are two years in arrears. If Gibraltar declares a $2,137,500 dividend during the current period, the amount of the dividend applicable to the preferred and common stockholders is:

Dividends are calculated on the Average Daily Balance and paid monthly (dividend rates are determined by the board of directors each month)

Preferred dividends are generally fixed they can be valued as a constant growth rate of zero. You use the zero growth models for the preferred stock and the assumption that the dividends always stay the same and you use the constant growth model for common stock because the dividend grows by a specific percent a year.

What is the Cost of Preferred Stock (if any)? (quote current yield on preferred stock---identifying source and date of source, provide dividend $ and stock price; also compare to dividends paid in last three years on issued and outstanding preferred stock)

The type of preferred stock that may be exchanged at the stockholder's option for common stock is:

Dividend rate = 10% = 0.1 Total book value = $1,000,000; No. of preferred share = total book value / par value = 1,000,000/100 = 10,000 Price of preferred share = Dividend / Cost of preferred share = 10*0.1/0.08 = $125 Total market value of preferred share = $125 * number of pref. share = 125* 10000 = 1,250,000

A dividend is a usually distributed in cash form to stock holders of a corporation approved by the board of director. It may also include stock dividend or other forms of payment. A stock dividend represents a distribution of additional shares to common stockholders. Dividends are only cash payments regularly made by corporations to their stockholders.