Dividends declared = common dividends only?

[Ernest_Seow]

Dear all,

I understand from Schweser’s Note that:

Dividends declared refers to total dividends on a firm-wide basis.

Question: Does dividends declared refer to common dividends only? Or it refer to both common and preferred dividends. (Assumption: Firm capital structure include both preferred and common equity)

Thanks!

Cheers,

Ernest

[S2000magician]

Although it refers to both, I’ve never seen CFA Institute ask a question in which they had preferred dividends declared.

[Ernest_Seow]

@S2000magician

Although it refers to both, I’ve never seen CFA Institute ask a question in which they had preferred dividends declared.

Thanks S2000magician!

So whenever I’m asked to compute rentention rate (" RR"):

RR= 1- (dividends declared)/(net income available to common);

the dividends declared will be the dividends for both common and preferred shareholders?

[S2000magician]

@Ernest_Seow

@S2000magician

Although it refers to both, I’ve never seen CFA Institute ask a question in which they had preferred dividends declared.

Thanks S2000magician!

So whenever I’m asked to compute rentention rate (" RR"):

RR= [1 - (dividends declared)]/(net income available to common);

the dividends declared will be the dividends for both common and preferred shareholders?

Once again, in theory it should include all dividends – common and preferred – but I’ve never seen CFA Institute include preferred dividends in a question on retention ratio or payout ratio.