Question

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 70,000 shares of cumulative preferred 3% stock, $20 par and 410,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $32,000; second year, $73,000; third year, $80,000; fourth year, $110,000. Determine 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 "0.00".

eBook Show Me How Calculator Print Item Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 70,000 shares of cumulative preferred 3% stock, $20 par and 410,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $32,000; second year, $73,000; third year, $80,000; fourth year, $110,000. Determine 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 "0.00". 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividends per share) $ * $ 0.46 0.00 0.74 0.00 2.1 0.04 x x $ [ 2.1 x 0.17 Common stock (dividends 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 stock (dividend per share)	$0.46	$0.74	$0.60	$0.60
Common stock (dividend per share)	0.00	$0.05	$0.09	$0.17

Explanation:

Preferred stock per year = 70,000 stock * $20 * 3 % = $42,000

Year	Total dividend	Preferred stock		Common stock
		Preferred dividend	Dividend per share	Common stock dividend	Dividend per share
1	$32,000	$32,000	$0.46 ($32,000 / 70,000 shares)	0.00	0.00
2	$73,000	$52,000 (42,000 of C.Y + 10,000 of P.Y)	$0.74 ($52,000 / 70,000 shares)	$21,000	$0.05 ($21,000 /410,000 shares)
3	$80,000	$42,000	$0.60 ($42,000 / 70,000 shares)	$38,000	$0.09 ($38,000 /410,000 shares)
4	$110,000	$42,000	$0.60 ($42,000 / 70,000 shares)	$68,000	$0.17 ($68,000 /410,000 shares)