Question

How do I calculate this Equation?

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 80,400 shares of cumulative preferred 3% stock, $15 par, and 399,900 shares of $23 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $57,000 ; second year, $77,800 ; third year, $78,500 ; fourth year, $99,800 .

Calculate the dividends per share on each class of stock for each of the four years. (Preferred Stock & Common Stock are my two needed categories)

Answer 1

Annual preferred dividend = Number of preferred shares outstanding x Par value per preferred stock x Dividend rate

= 80,400 x 15 x 3%

= $36,180

Dividend Distribution Table
Year	Paid to Preferred Stockholders	Paid to Common Stockholders
1	36,180	57,000-36,180 = 20,820
2	36,180	77,800-36,180 = 41,620
3	36,180	78,500-36,180 = 42,320
4	36,180	99,800-36,180 = 63,620

Dividend Per Share Table
Year	Preferred Stock	Common Stock
1	36,180/80,400 = 0.45	20,820/399,900 = 0.05
2	36,180/80,400 = 0.45	41,620/399,900 = 0.10
3	36,180/80,400 = 0.45	42,320/399,900 = 0.11
4	36,180/80,400 = 0.45	63,620/399,900 = 0.16

Kindly comment if you need further assistance.

Thanks‼!