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 401,700 shares of $27 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $56,300 ; second year, $77,000 ; third year, $81,000 ; fourth year, $101,400 .

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

	Year 1	Year 2	Year 3	Year 4
Preffered stock (dividend per share)	0.30	0.30	0.30	0.30
Comman stock (dividend per share)	0.08	0.13	0.14	0.19

Workings as follows

	Year 1	Year 2	Year 3	Year 4
Dividend distributed (a)	56,300.00	77,000.00	81,000.00	101,400.00
Dividend for preffered stock @2% (81,600*15*2%) (b)	24,480.00	24,480.00	24,480.00	24,480.00
Balance available to equity share holders (c=a-b)	31,820.00	52,520.00	56,520.00	76,920.00
Dividend per preffered stock (b/81,600)	0.30	0.30	0.30	0.30
Dividend per comman stock (c/401,700)	0.08	0.13	0.14	0.19