A company had stock outstanding as follows during each of its first three years of operations: 2,000 shares of 8%, $100 par, cumulative preferred stock and 34,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the schedule. Round dividends per share to the nearest cent. Enter "0" if no dividends are paid.

Question

Frances Morgan

Business

3 November, 08:07

A company had stock outstanding as follows during each of its first three years of operations: 2,000 shares of 8%, $100 par, cumulative preferred stock and 34,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the schedule. Round dividends per share to the nearest cent. Enter "0" if no dividends are paid.

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Ryan Shaffer · Answer 1

2,000 shares of 8% $100 par cumulative preferred stock = $16,000 (if preferred stock dividends are not paid one year, they accumulate until they are fully paid in the next years)

34,000 shares $10 par common stocks

Year Dividends Preferred Per Common Per

stocks p. s. stocks c. s.

1 $12,000 $12,000 $6 $0 $0

2 $16,000 $16,000 $8 $0 $0

3 $24,740 $20,000 $10 $4,740 $0.14

Preferred stock dividends are paid before common stock dividends.