Question

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 81,400 shares of cumulative preferred 2% stock, $15 par, and 401,500 shares of $27 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $56,500 ; second year, $76,500 ; third year, $79,800 ; fourth year, $99,400 .

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

Answer: Calculation of Dividend per Share: Cart Year 1 56,500 24,420 Year 2 76,500 24,420 Year 3 79,800 24,420 Year 4 99,400 24,420 Total Dividend declared Preferred Dividend Preferred Dividend in arrears Total Preferred Dividends Common Dividend 24,420 32,080 24,420 52,080 24,420 55,380 24,420 74,980 Preferred Stock (Dividend per Share) Common Stock (Dividend per Share) 0.30 0.08 0.30 0.13 0.30 0.14 0.30 0.19 Calculation: Total Preferred Dividend = 81,400 * $15 * 2% = $24,420 Preferred Stock Dividend per Share = Total Preferred Dividends / Preferred Stock Outstanding Common Stock Dividend per Share = Total Common Stock Dividend / Common Stock Oustanding