When Crossett Corporation was organized in January Year 1, it immediately issued 4,100 shares of $52 par, 8 percent, cumulative preferred stock and 10,000 shares of $11 par common stock. Its earnings history is as follows: Year 1, net loss of $12,100; Year 2, net income of $110,000; Year 3, net income of $115,700. The corporation did not pay a dividend in Year 1. Required
a. How much is the dividend arrearage as of January 1,2019?
b. Assume that the board of directors declares a $40,000 cash dividend at the end of 2019 (remember that the 2018 and 2019 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders?

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.