Question

York’s outstanding stock consists of 90,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 270,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:  

2015 total cash dividends	$	23,000
2016 total cash dividends		31,700
2017 total cash dividends		235,000
2018 total cash dividends		385,000

Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also, determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)

Answer 1

Answer . The outstanding stock consists = 90,000 Shares of noncumulatore 7.51. preferred stock with 5 par value and also 270,000 Common strock $1 par value Year paid to Paid to Dividends in Total cash dividendo 2 Paid Poud 1. Common Arrears (6] Lamb) 230000 2015 23000 $ 23000 23000-23000 2016 ... $.31700 Jmto $3100 31700-31700 2017 $ 235000 $33750 235000-33750 0 -$201250

2018 385-000 $33750 385000-33750 0 351250 > 23000 t 31700 + 235 000 + 385000 Total years cash = 674700 Pardlo Preferred'- 23000 +31400 + 3350 +33150 122200 Common 201250 + 351250 - 552500 Explanation - Annual preferred dividend a' Par values per preferred share = 5.00 Dividend Rate (b) = 7.50%

Dividends per preferrd share e axb) - 5.00 X 7.50 = 0.375 Number of Preferred shares (2) = 90000 Preberred windends e = (cd) 0375 X 90000 = $33750