007 Dividend Allocation

Question 1

List the order of payment for partially participating stocks.

Answer 1

1 Dividends in arrears; 2 Current p/s dividend; 3 Preferred stock receives up to an additional percentage.

Question 2

List the order of dividend payment when partially participating preferred stock is outstanding.

Answer 2

1 Preferred: Any dividends in arrears; 2 Preferred: Current period dividends; 3 Common: Preferred percentage x total par outstanding; 4 Preferred: Additional percentage; 5 Preferred: Additional percentage;

Question 3

List the order of dividend payment if nonparticipating preferred stock is outstanding.

Answer 3

1 Preferred: dividends in arrears (if cumulative); 2 Preferred: current period dividend; 3 Common: remainder.

Question 4

What dividends are paid before any other dividends are paid?

Answer 4

Preferred stock dividends in arrears.

Question 5

Is there any additional participation to preferred stock if total dividends are not sufficient to provide common stock with dividends based on the fully participating preferred percentage?

Answer 5

There is no additional participation.

Question 6

Is there any additional participation to preferred stock if total dividends are not sufficient to provide the partially participating preferred percentage to both common stock and preferred stock?

Answer 6

The remainder of dividends after the basic preferred percentage is provided to common, is multiplied by the ratio: total preferred par value to total par value of both classes of stock.