Intermediate III Ch18Q5 | The shareholders’ equity of MLS Enterprises includes $200 million - YouTube

what's going on everybody John Bradshaw here or here on question 5 homework 18

let me give you a few seconds to read the question if you guys don't like me

giving you a few seconds to read the question provoked ah meant I don't know

I'm just thinking it's a lot faster I just let me know anyway let's get

The shareholders’ equity of MLS Enterprises includes $200 million of no par common stock and $400 million of 6% cumulative preferred stock. The board of directors of MLS declared cash dividends of $50 million in 2018 after paying $20 million cash dividends in both 2017 and 2016. What is the amount of dividends common shareholders will receive in 2018? (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

started so this question is asking us that dividends common shares always even

twenty eighteen real quick we know that the Board of Directors declared cash

dividends of 50 million in 2018 so 2018 total cash dividends is 50 million right

after paying 20 million cash dividends in both 17 and 16 so they paid 20

million in 16 and 17 right we know that the par value of preferred stock is

going to be right here so it's going to say 400 million of 6% cumulative

preferred stock so we're looking at 400 of preferred stock and the dividend rate

is 6% and this is an important word cumulative I'm not sure if I'm saying

that right I'm gonna go ahead and call it cumulative and what that means well

we'll get to that in a second so we know it's $400 400 million and they're gonna

be paying out 6% dividends to the

preferred preferred stock holders so we have 400 million times 6% or 0.06 we're

looking at 24 million is going to be an annual preferred dividend 24 million so

what this means is that every year they're going to pay the preferred

stockholders 24 million dollars and what Q cumulative means is that if they can't

afford it they'll pay them for that year the next

year and if they can't then it'll be the next year so let's go ahead and again

get this started so

total cash dividend paid again this is coming right here from right here they

pay twenty million in 2016 but the paid to preferred should have been twenty

four so what does that mean that the whole twenty million goes to the

preferred stockholders so how much do they pay to the people in common they

don't pay him jack crap am i right they get nothing so what does this mean it

means that we still owe the preferred stockholders twenty four million because

we only paid him 20 and we're supposed to pay him twenty four so we still own

four million that goes right here 2017 we pay out 20 million dividends again

it's over here so we of course it's the same thing so far so we pay our

preferred stockholders 20 mil and we still owe them for a million dollars or

short-form million four million from twenty four so what do we pay our common

shareholders we can Pam crap they don't get nothing they're not preferred no one

cares right so now how much do we have at the end of the year we have the

fourth from 2016 and the four from 2017 that comes out to eight so we have eight

million that we got to pay our preferred shareholders now in 2018 we get fifty

million dollars that we're gonna end up paying out for dividends now we owe 24

million for 2018 let me get my calculator calculate when t4 million for

2018 correct plus we all preferred shareholders another 4 million from 2016

plus another 4 million from 2017 so we are preferred we're paying our preferred

shareholders 32 million in 2018 32 million you can also do just 24 plus 8

right this is this number right here or 24 plus 4 plus 4 same same difference

whatever is easier for you but that's how I'm getting the numbers from we're

getting up we're adding 24 to these over to eat

to finish paying off our preferred and then the rest of the money the 50

million we have 50 million we give away 32 million to our preferred shareholders

the 18 million goes to our common shareholders how much do we have at the

end of the year nothing we use it all we paid all our dividends we don't owe

anybody nothing and that's essentially it fellas but real quick I do make

mistakes right yeah so let's check the work what's going on what's up oh yeah

baby answer its completing correct it's impeccable that's that's impeccable

pretty simple guys just read the question follow the

problem and these this is pretty straightforward it just takes a little

bit of practice you got to understand some of these words but once you get it

it's pretty simple if you have any questions leave a comment if this video

helped you out you better hit me up with a like I need those likes those likes

let me tell you they tell me that this video is helping you out this video

these videos don't help anybody out I'm just wasting my time because I'm doing

this to change the world trying to help everybody out there and leave your

questions and I'll try my best to answer I'm working together I want to work

together as a community to help you know people going to college we're all just

going to school here guys what you're trying to get by I get it so am I so

yeah let's help each other out anyway leave a like subscribe i'll see you guys

in question six in the next video