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Exercise 11.6 Preference share Alternatives L.O. 5, 6 Walker Limited has the following capital structure:...

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Exercise 11.6 Preference share Alternatives L.O. 5, 6 Walker Limited has the following capital structure: $ 152,500 Preference shares- $25 par value, 10,000 shares authorized, 6,100 shares issued and outstanding Ordinary shares $10 par value, 100,000 shares authorized, 80,000 shares issue and outstanding 800,000 Total issued and fully paid capital Retained earnings $ 952,500 550,000 Total shareholders' equity $1,502,500 The number of issued and outstanding shares of both preference and ordinary shares have been the same for the last two years. Dividends on preference shares are 8 percent of par value and have been paid each year the share was outstanding except for the immediate past year. In the current year, management declares a total dividend of $50,000. a. Indicate the amount that will be paid to both preference and ordinary shareholders assuming the preference shares is not cumulative. (Omit the "$" sign in your response.) $ Amount to preference shares Amount to ordinary shares $ b. Indicate the amount that will be paid to both preference and ordinary shareholders assuming the preference shares is cumulative. (Omit the "$" sign in your response.) $ Amount to preference shares Amount to ordinary shares $

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