Compute the amount of dividends

Calculate the proposed distribution of dividends in E13.15 assuming that the preferred stock is noncumulative. E13.15

The board of directors of Picasso Manufacturing, Inc., may declare a dividend this year but has not declared a dividend for the past two years. The corporation has 800,000 shares of $1 par value common stock authorized and 200,000 shares issued and outstanding. It also has 40,000 shares of 5 percent, $10 par value cumulative preferred stock authorized, of which 40,000 shares are issued and outstanding. Compute the amount of dividends available for common and preferred shareholders if the dividend declaration is $80,000.

Zulu Corporation has 5,000,000 shares of $0.03 par value common stock authorized, of which 750,000 shares were issued for $3,550,000 and are currently selling for $90 in the stock market. Zulu Corporation is considering a three-for-one stock split.

What will be the impact of the stock split on Zulu Corporation?



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