Deciphering Financial Statements (General Motors)
In 1993, General Motors paid cash dividends on 11 different classes of capital stock. Those classes of stock were as follows:
|
|
Dividends |
Total Dividends |
|
|
per Share |
(in millions) |
|
Preferred stock, $500 series |
$168 |
$ 26 |
|
Preferred stock, $375 series |
126 |
10 |
|
Preferred stock, E I series |
142 |
46 |
|
Preferred stock, Series A Conversion |
331 |
590 |
|
Depositary Shares, Series B |
228 |
1011 |
|
Depositary Shares, Series C |
325 |
1036 |
|
Depositary Shares, Series D |
198 |
311 |
|
Depositary Shares, Series G |
234 |
538 |
|
$1 2/3 par value common stock |
080 |
5658 |
|
Class E common stock |
040 |
972 |
|
Class H common stock |
072 |
641 |
|
Total |
|
$1,0839 |
1. The January 1, 1993, balance in General Motors’ retained earnings was a negative $3.354 billion. The December 31, 1993, balance was a negative $2.003 billion. How is it possible that General Motors was able to pay cash dividends during 1993?
2. This question will require a little research. What is the difference in stockholder rights between General Motors’ $12/3 common stock and the Class E and Class H common shares? How did the Class E and Class H shares come into existence?
3. In May 1993, General Motors redeemed all of the $5.00 series and $3.75 series preferred stock. The board of directors stated that the redemption of these preferred shares would give the company more financial flexibility by eliminating certain covenants associated with the shares. Get a copy of GM’s most recent annual report and find out how many of the 11 issues of General Motors’ capital stock outstanding in 1993 are still outstanding.