Question

Dividends Per Share Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 10,000 shares of cumulative preferred 2% stock, $110 par, and 33,000 shares of $10 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $14,700; second year, $39,300; third year, $47,300; fourth year, $67,870. Compute 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 (dividend per share) 1.47 1.34 x $ 2.15 x 3.08 X Common stock (dividend per share) 0 ✓ 0.10 x $ 0.25 x 0.45 X

Answer 1

Prior year unpaid dividend on cumulative preferred shares is paid before any dividend is paid on common shares
Annual dividend on preferred shares = 10,000*2%*110 = $22,000 i.e. $2.2 per share
Year	1	2	3	4
Total Dividend paid	14,700.00	39,300.00	47,300.00	67,870.00
Total Dividend on preferred shares	14,700.00	29,300.00	22,000.00	22,000.00
Total Dividend on common shares	-	10,000.00	25,300.00	45,870.00
Preferred Stock (Dividend per share)	1.47	2.93	2.20	2.20
Common Stock (Dividend per share)	-	0.30	0.77	1.39
Unpaid dividend on preferred stock carried forward	7,300.00	-	-	-