JC Clouston Limited reported the following items in shareholders’ equity

Question
JC Clouston Limited reported the following items in shareholders’ equity on December 31, 2020: Share capital: Preferred shares, 6% cumulative, 525,000 shares issued and outstanding ………….. $13,125,000 Share capital: Common shares, 1,000,000 issued and outstanding ……………………………………………… 50,000,000 Retained earnings …………………………………………… 65,000,000 a. No dividends were declared in 2018 or 2019; however, in 2020 cash dividends of $4 million were declared. Calculate how much would be paid to each class of shares. b. Assuming that the number of common shares remained constant throughout 2020, what was the cash per share distributed to the common shareholders? c. Early in 2021, when its common shares were selling at $65 per share, the company declared and distributed a 30% Describe the impact that this declaration will have on the shareholders’ equity accounts. d. Determine the expected market price per share after the company declares and distributes the stock dividend.

Question

JC Clouston Limited reported the following items in shareholders’ equity on December 31, 2020: Share capital: Preferred shares, 6% cumulative, 525,000 shares issued and outstanding ………….. $13,125,000 Share capital: Common shares, 1,000,000 issued and outstanding ……………………………………………… 50,000,000 Retained earnings …………………………………………… 65,000,000 a. No dividends were declared in 2018 or 2019; however, in 2020 cash dividends of $4 million were declared. Calculate how much would be paid to each class of shares. b. Assuming that the number of common shares remained constant throughout 2020, what was the cash per share distributed to the common shareholders? c. Early in 2021, when its common shares were selling at $65 per share, the company declared and distributed a 30% Describe the impact that this declaration will have on the shareholders’ equity accounts. d. Determine the expected market price per share after the company declares and distributes the stock dividend.

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