Question

Dividends Per Share Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 17,000 shares of cumulative preferred 1% stock, $110 par, and 57,000 shares of $5 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $12,580; second year, $34,820; third year, $50,120; fourth year, $85,390. Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0". 1st Year Preferred stock (dividend per share) ON 2nd Year 2.04 * x $ $ 3rd Year 1.68 X 0.37 X $ $ 4th Year 1.10 1.17 Common stock (dividend per share) Feedback Check My Work Is the preferred stock cumulative or non-cumulative stock? Determine what amount of current dividends that preferred stock should receive per year. Is the question asking for a per share amount or total amount per class of stock?

Answer 1

Answer

	1st year	2nd year	3rd year	4th year
Preferred Dividend per share	$                         0.74	$                    1.46	$                   1.10	$                   1.10
Common Stock per share	$                              -	$                    0.18	$                   0.55	$                   1.17

--Working

	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$                        110	1.00%	$                   1.100	17,000	$            18,700.00
	Total Cash Dividend paid	Paid to Preferred	Paid to Common	Dividends in Arrears at Year end
Year 1	$            12,580.00	$           12,580.00	$                          -	$             6,120.00
Year 2	$            34,820.00	$           24,820.00	$           10,000.00	$                          -
Year 3	$            50,120.00	$           18,700.00	$           31,420.00	$                          -
Year 4	$            85,390.00	$           18,700.00	$           66,690.00	$                          -
TOTAL	$          182,910.00	$           74,800.00	$        108,110.00	$                          -

	1st year	2nd year	3rd year	4th year
Preferred Dividend:
Total	$              12,580.00	$          24,820.00	$         18,700.00	$        18,700.00
Dividend per share	$                         0.74	$                    1.46	$                   1.10	$                   1.10
Common Stock Dividend:
Total	$                              -	$          10,000.00	$         31,420.00	$        66,690.00
Dividend per share	$                              -	$                    0.18	$                   0.55	$                   1.17