Question

Book MOH MOU Dividends Per Share Imaging Inc., a developer of radiology equipment, has stock oustanding as follows: 18,000 shares of cumulative preferred 4% stock, $140 par, and 60,000 shares of $15 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $67,500; second year, $144,100; third year, $177,720; fourth year, $202,800. Compute the dividends per share on each dass of stock for eadch of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter 0 1st Year 2nd Year 3rd Year 4th Year Prefered stock (dividend per share) Common stock (dividend per share) BBBB

Answer 1

Particulars	Year1	Year2	Year3	Year4
Preferred stock	3.75	8.0056	6.2444	6
Common stock	0	0	1.0887	1.58

Year 1 - dividends - 67,500

For preferred stock - (18000*140*4%) = 108,000

Minimum of both = 67,500

Dividend per share = 67,500/18000 =

Year 2 - dividends - 144,100

Cumulative preference dividend of previous year = 40,500

Current year dividend = 108,000

Total cumulative preference dividend = min of 144,100 and (40,500+108,000) = 144,100

Dividend per share = 144,100/18000 = 8.0056

Year 3 dividends - 177,720

Cumulative preference dividend of previous year = 4,400

Current year dividend - 108,000

Total cumulative preference dividend = (4,400+108,000) = 112,400

Preferred dividend per stock = 112,400/18000= 6.2444

Dividend for common stock = (177,720-112,400) = 65,320

Common stock dividend per stock = 65,320/60,000 = 1.0887

Year 4 dividends = 202,800

Dividend for preferred stock = 108,000

Preferred dividend per stock = 108,000/18000 = 6

Dividend for common stock = 202,800-108000 = 94,800

Common stock dividend per stock = 94,800/60,000 = 1.58