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  3. problem i this year lemon co. has $20 million in e

Problem I This year Lemon Co. has $20 million in earning before interest and taxes,...

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Accounting

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Problem I This year Lemon Co. has $20 million in earning before interest and taxes, will pay $2.75 million in interest to bondholders. It will also pay a fixed annual preferred dividend of $1.20 per share this year, and since it couldn't pay preferred dividends last year it will pay last year's dividends to preferred stockholders too. There are 1 million preferred shares outstanding Corporate tax rate is 35%. There are 1.5 million shares of commonstock outstanding ommon toc s is currently selling for $26 per share. Rove's common dividend payout ratio is 30%. Calculate: a. Total dividends that should be paid to preferred stockholders this year 5 pts) b. Common dividend per share (5pts) c. How much did the company add to retained earnings after paying common dividends? (S pts) d. Dividend yield (for common stock) (Spts)

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