Question

Question 11 Answer all Past 1-3

Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 2041, $20,000; 2012, $40,000; 20Y3, $95,000; 20Y4, $115,000; 2015, $140,000; and 20Y6, $175,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative, preferred 2% stock, $100 par, and 100,000 shares of common stock, $5 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "o". Preferred Dividends Common Dividends Total Dividends Year Total Per Share Total Per Share 20Y1 $ 20,000 2042 40,000 20Y3 95,000 2014 115,000 2015 140,000 2016 175,000 2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places. Average annual dividend for preferred per share Average annual dividend for common per share

Answer 1

Solution 1:

D Е F G Н К 1 2 Pecan theatre 3 4 Preferred Dividends Common Dividends Total Arrears at year end 5 Total Dividends Total Total Per Share Year Per Share $20,000 $40,000 $95,000 $115,000 $0 $0 $5,000 $65,000 $90,000 $125,000 $0.00 $0.00 $20,000 $40,000 $90,000 $50,000 $50,000 $50,000 $30,000 $40,000 $0 Year 1 $0.80 $1.60 Year 2 7 Year 3 $3.60 $0.05 $2.00 $2.00 $2.00 $0 $0.65 9 Year 4 $0.90 $140,000 $0 10 Year 5 $175,000 $0 $1.25 11 Year 6 12 $300,000 $285,000 Total 13 14 15 16 17 18 19 20 21 Sheet85 (5) Sheet85 (6) Sheet721 (2) et731 Sheet732 Sheet727 (2) Sheet734 Sheet640 1I S

Solution 2:

Average annual dividend for preferred = ($300,000/6 years) / 25000 shares = $2 per share

Average annual dividend for common = ($285000/6) / 100000 = $0.48 per share

Solution 3:

Preferred stock = average annual dividend for preferred / market price = $2 /$143 = 1.40%

Common stock = average annual dividend for common / market price = $0.48 /$10 = 4.80%