To determine the total amount of dividends to be paid to the preferred shareholders and common shareholders, we'll break down the problem step by step.
### Step 1: Calculate Preferred Dividends
We know that the preferred shareholders hold 28,000 shares with a par value of [tex]$60 each and the dividend rate is 7 percent.
The formula to calculate the preferred dividend is:
\[ \text{Preferred Dividend} = \text{Number of Preferred Shares} \times \text{Par Value per Preferred Share} \times \text{Dividend Rate} \]
Let's input the values:
\[ \text{Preferred Dividend} = 28,000 \times 60 \times 0.07 \]
So,
\[ \text{Preferred Dividend} = \$[/tex]117,600 \]
### Step 2: Calculate Common Dividends
We know that the common shareholders hold 98,000 shares, and the dividend per share is [tex]$5.
The formula to calculate the common dividend is:
\[ \text{Common Dividend} = \text{Number of Common Shares} \times \text{Dividend per Share} \]
Let's input the values:
\[ \text{Common Dividend} = 98,000 \times 5 \]
So,
\[ \text{Common Dividend} = \$[/tex]490,000 \]
### Step 3: Calculate Total Dividends
To find the total amount of dividends to be paid to all shareholders, we add the preferred dividends and the common dividends together.
The formula to calculate the total dividend is:
[tex]\[ \text{Total Dividends} = \text{Preferred Dividend} + \text{Common Dividend} \][/tex]
Let's add the values:
[tex]\[ \text{Total Dividends} = 117,600 + 490,000 \][/tex]
So,
[tex]\[ \text{Total Dividends} = \$607,600 \][/tex]
### Summary
- Preferred Dividends: \[tex]$117,600
- Common Dividends: \$[/tex]490,000
- Total Dividends: \[tex]$607,600
The total dividends to be paid to the shareholders would thus be \$[/tex]607,600.
Here is the summary table:
[tex]\[
\begin{array}{|l|r|}
\hline
\text{Preferred stock} & \$117{,}600 \\
\hline
\text{Common stock} & \$490{,}000 \\
\hline
\text{Total dividends} & \$607{,}600 \\
\hline
\end{array}
\][/tex]
