Question

Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 80,000 shares of cumulative preferred 3% stock, $20 par and 400,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $30,000; second year, $73,000; third year, $100,000; 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".

Answer 1

Dividend per share: Preferred stock (dividend per share) Common stock ( dividend per share) 1 Year 0.38 0.00 2 Year 0.83 0.02 3 Year 0.60 0.13 4 Year 0.60 0.16) Explanation: Amount distributed Preferred dividend Common dividend 1 Year 30000 30000 2 Year 73000 66000 7000 3 Year 100000 48000 52000 4 Year 110000 48000 62000 Preferred dividend per share = Preferred dividend / Preferred shares Common stock dividend = Commonstock dividend / Common shares