Determine the amount of dividends to be paid

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Question - BTS Company has P850,000 available to pay dividends. It has 6,000 shares of 10%, P100 par, preference shares and 90,000 shares of P10 par ordinary shares outstanding. The preference shares are selling for P125 per share and the ordinary share is selling for P20 per share. Preference dividends are two year in arrears at the beginning of year.

1. Determine the amount of dividends to be paid to preference shareholder if preference shares are non- cumulative and are participating in distributions in excess of a 12% dividend rate on the ordinary shares.

2. Determine the amount of dividends to be paid to ordinary shareholder if preference shares are non- cumulative and are participating in distributions in excess of a 12% dividend rate on the ordinary shares.

Reference no: EM133186310

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