Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 18,000 shares of cumulative...

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Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 18,000 shares of cumulative preferred 4%

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Answer 1

Answer #1

Preferred shares dividend= 18000*$150*4%= $108000

Year	Preferred stock dividend	Preferred stock dividend per share	Common stock dividend	Common stock dividend per share
1st Year	$72360	72360/18000= $4.02	$0	$0
2nd Year	143640	(143640/18000)= $7.98	(153640-143640)= 10000	(10000/60000)= $0.17
3rd Year	108000	(108000/18000)= $6	(183600-108000)= 75600	(75600/60000)= $1.26
4th Year	108000	(108000/18000)= $6	(198000-108000)= 90000	(90000/60000)= $1.50

Arrears of 1st Year= $108000-72360= $35640

2nd Year Preferred stock dividend= Current years dividend+Arrears of 1st Year

= $108000+35640= $143640

	1st Year	2nd Year	3rd Year	4th Year
Preferred stock (dividend per share)	$4.02	$7.98	$6.00	$6.00
Common stock (dividend per share)	$0	$0.17	$1.26	$1.50

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