Question

Dividends Per Share Windborn Company has 20,000 shares of cumulative preferred 1 stock, S50 par and 50.000 shares of $20 par common stock. The following amounts were distributed as dividends: 2011 $25,000 2012 8,000 203 30,000 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 'o'. Preferred Stock Common Stock (dividends per share) (dividends per share) 2011 2012 2093

Answer 1

Year	Preferred dividend (Dividend per share)	Common dividend (Dividend per share)
20Y1	$0.5	$0.3
20Y2	$0.4	$0
20Y3	$0.6	$0.36

Calculation

Year			20Y1
Total dividends			$        25,000
Less: preferred dividend (20000*50*1%)			$        10,000
Common dividend			$        15,000
	Total	Divided by: Number of shares	Dividend per share
Preferred dividend	$ 10,000	20,000	$            0.50
Common dividend	$ 15,000	50,000	$            0.30
Year			20Y2
Total dividends			$          8,000
Less: Prefered dividend (20000*50*1%)			$        10,000
Unpaid dividends to preferred stock (this dividend will be paid in the next year. (10000-8000)			$          2,000
Dividend paid to prefered dividend in 20Y2			$          8,000
	Total	Divided by: Number of shares	Dividend per share
Preferred dividend	$    8,000	20,000	$            0.40
Common dividend	$             0	50,000	$            0.00
Year			20Y3
Total dividends			$        30,000
Less: Prefered dividend
For current year (20000*50*1%)		$        10,000
For previous year (Unpaid dividends to preferred stock)		$          2,000
Preferred dividend			$        12,000
Common dividend			$        18,000
	Total	Divided by: Number of shares	Dividend per share
Preferred dividend	$ 12,000	20,000	$            0.60
Common dividend	$ 18,000	50,000	$            0.36