Question

Calcula Show W HOW Book Dividends Per Share Windhom Company has 25,000 shares of cumulative preferred 2% stock, $100 par and 50,000 shares of $20 par common stock. The following amounts were distributed as dividende: $125.000 Year 2 40,000 Year 3 150,000 Determine the ridends per share for preferred and common stock for Preferred Stock (dividends per share) (dividend per share) Year 2 Cred My Web о е во G D 3 Ruoli

Answer 1

The Nature of CUMULATIVE PREFERRED SHARES is if the dividend is not paid in a year the it will be carried forward to next year before distributing to common stock share holders Year 1 Year 2 Year 3 Preferred Stock (Dividend per share) 2.00 1.60 2.40 Common Stock (Dividend per share) $ 1.50 $ $ 1.80 Explanation:- Dividend to preferred shares = 25,000 X 2% X $100 = 50,000 Distributed as Dividend $ 1,25,000 $ 40,000 1,50,000 Year 1 Year 2 Preferred Stock 50,000 $ 40,000 $ 60,000 $ Common Stock 75,000 $ $ Year 3 90,000