Question

Dividends Per Share

Windborn Company has 10,000 shares of cumulative preferred 1% stock, $50 par and 50,000 shares of $5 par common stock. The following amounts were distributed as dividends:

Year 1	$7,500
Year 2	2,500
Year 3	15,000

Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

	Year 1	Year 2	Year 3
Preferred stock (Dividends per share)	$	$	$
Common stock (Dividends per share)	$	$	$

Answer 1

rate positively ..

	Annual perferred dividend =	5000
	10,000*50*1%
	Computation of dividend per share
		Year 1	Year 2	Year 3
	Total dividend	$7,500	2,500	15,000
	Preferred dividend	5000	2,500	7,500
	Common dividend	$2,500	$0	$7,500
	Number of share
	Preferred	10000	10000	10000
	Common	50000	50000	50000
Ans	Dividend per share
	Preferred	0.5	0.25	0.75
	Common	$0.05	$0.00	$0.15