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applicable dividend rate by that share’s liquidation value.50 As
of each December 31, the liquidation value of a share of series A
preferred stock equaled its face value ($1,000) plus all
preferential dividends that had not been paid as of the most
recent January 15. Thus, assuming as we did in Trompeter I that
the series A preferred stock was issued on March 15, 1989, the
liquidation values of each share of that stock on Dec. 31, 1989,
1990, 1991, 1992, 1993, 1994, and 1995 (assuming that the share
had not been redeemed, exchanged, or had dividends paid with
respect thereto) were $1,000, $1,071.8068, $1,170.9871,
$1,302.4101, $1,512.0629, $1,701.0708, and $1,913.7047,
respectively. The following accrued dividends which were not
included in the liquidation value were also payable on each of
those shares as of those respective dates: $67.7671, $94.2603,
$125.424, $156.1291, $181.2404, $203.8955, and $229.3824. Thus,
as of December 31, 1993, 1994, and 1995, respectively, the
50 The certificate of designation provides that “dividends
on each share of the Series A Preferred Stock * * * will accrue
on a daily basis at the rates per annum computed with respect to
the Redemption Price thereof” and that Sterling “will be
obligated on the Redemption Date to pay to the holder * * * [of
each share to be redeemed] an amount in immediate available funds
equal to the Liquidation Value thereof (the “Redemption Price”).”
The certificate of designation also provides that “all dividends
which have accrued on each Share outstanding during the
twelve-month period * * * ending upon each * * * [Jan. 15] will
be added to the Liquidation Value of such Share and will remain a
part thereof until such dividends are paid.”
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