Question

Dividends Per Share

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 81,600 shares of cumulative preferred 2% stock, $15 par, and 400,000 shares of $27 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $55,300 ; second year, $77,500 ; third year, $79,800 ; fourth year, $101,600 .

Calculate 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".

	1st Year	2nd Year	3rd Year	4th Year
Preferred stock (dividends per share)	$	$	$	$
Common stock (dividends per share)	$	$	$	$

Answer 1

WORKING NOTES:
				Interest @ 2% Per year on preferred shares
Peferred Capital = 81,600 Shares 2% of $ 15 Each =			$                    12,24,000	$                          24,480
Common Share Capital = 400,000 Shares of $ 27			$                1,08,00,000
Cumulative means the if the preference dividend is not paid in the last year then that shoul be accumulate
in next years payment ot it will carry forward as unpaid dividend
SOLUTION :
Year	total Cash Dividend Paid (A)	Paid to Preferred Stock (B)	Paid to Common Shares (A -B)	Preference Dividend in the arreas
1st Year	$                           55,300	$                                  24,480	$                    30,820.00	$                                    -
2nd Year	$                           77,500	$                                  24,480	$                    53,020.00	$                                    -
3rd Year	$                           79,800	$                                  24,480	$                    55,320.00	$                                    -
4th Year	$                       1,01,600	$                                  24,480	$                    77,120.00
ANSWER =
		1ST Year	2Nd Year	3Rd Year	4th Year
Preferred stock (dividends per share)		$                                  24,480	$                          24,480	$                          24,480	$                    24,480
Common stock (dividends per share)		$                                  30,820	$                          53,020	$                          55,320	$                    77,120