Question

Dividends Per Share

Windborn Company has 25,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends:

Year 1	$150,000
Year 2	60,000
Year 3	225,000

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

Annual preferred dividends = 25000*150*2%= $75000
	Preferred stock dividends		Common stock dividends
	Total	Per share	Total	Per share
Year 1	75000	3	75000	1.5
Year 2	60000	2.4	0	0
Year 3	90000	3.6	135000	2.7