BU127 Lecture Notes - Lecture 20: Credit Risk, 2 On, Cash Flow
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BU127 Full Course Notes
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Convertible preferred shares may be exchanged for common shares. Callable (redeemable) preferred shares may be repurchase by the corporation at a predetermined price. Retractable preferred shares may be redeemed at the option of the shareholder for the redemption price dividends on preferred shares. Current dividend preference: the current preferred dividends must be paid before paying any dividends to common shares. Cumulative dividend preference: any unpaid dividends from previous years (dividends in arrears) must be paid before common dividends are paid. If the preferred shares are non-cumulative, any dividends not declared in previous years are lost permanently. Kites inc. has the following shares outstanding: common shares: 100,000 shares, preferred shares: . 00, cumulative, 5000 shares, preferred shares: . 00, non-cumulative, 3000 shares. In the current year, the board declared dividends of. Preferred shares (cumulative): in arrears: ( per share, 5,000 shares) = ,000, current year: ( per share, 5,000 shares) = ,000 o total paid: ,000, remainder: ,000.
