a.
To calculate: The amount of preferred dividend that the National Health Corporation (NHC) lacks.
Introduction:
Preferred Dividend:
It refers to the amount of dividend paid by a company on its preferred stock. Such dividend must be paid prior to that paid to common shareholders of the company. They are not tax deductible.
b.
To calculate: The arrears amount of the company when NHC earns $13,500,000 after taxes but before paying dividends in coming year.
Introduction:
Preferred Dividend in arrears:
It refers to the amount of dividend not yet paid by a company on its cumulative preferred stocks. It is recorded in the balance sheet of the company.
c.
To calculate: The amount of dividend to be paid out by NHC if any dividend is available out of $13,500,000 for common stock in the upcoming year.
Introduction:
Stock dividend:
It refers to the type of dividend paid by a company to its existing stockholders from the earnings made in the financial year. It is also paid on additional stocks.
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