stock outstanding as follows: 15,000 shares of cumulative 4%, preferred stock of $20 par, and 19,000 shares of $100 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $4,500; second year, $6,300; third year, $42,680; fourth year, $71,470.

Question

stock outstanding as follows: 15,000 shares of cumulative 4%, preferred stock of $20 par, and 19,000 shares of $100 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $4,500; second year, $6,300; third year, $42,680; fourth year, $71,470.

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 (dividend per share) $ $ $ $
Common stock (dividend per share) $ $ $ $

Answer 1

To calculate the dividends per share for each class of stock, we need to divide the total dividends paid in each year by the number of shares outstanding for that class of stock.

First, let's calculate the dividends per share for the preferred stock for each of the four years:

1st Year:
Total dividends paid = $4,500
Number of shares of preferred stock outstanding = 15,000
Dividends per share = Total dividends paid / Number of shares of preferred stock outstanding
Dividends per share = $4,500 / 15,000
Dividends per share = $0.30

2nd Year:
Total dividends paid = $6,300
Number of shares of preferred stock outstanding = 15,000
Dividends per share = Total dividends paid / Number of shares of preferred stock outstanding
Dividends per share = $6,300 / 15,000
Dividends per share = $0.42

3rd Year:
Total dividends paid = $42,680
Number of shares of preferred stock outstanding = 15,000
Dividends per share = Total dividends paid / Number of shares of preferred stock outstanding
Dividends per share = $42,680 / 15,000
Dividends per share = $2.85

4th Year:
Total dividends paid = $71,470
Number of shares of preferred stock outstanding = 15,000
Dividends per share = Total dividends paid / Number of shares of preferred stock outstanding
Dividends per share = $71,470 / 15,000
Dividends per share = $4.76

Now let's calculate the dividends per share for the common stock for each of the four years:

1st Year:
Total dividends paid = $4,500
Number of shares of common stock outstanding = 19,000
Dividends per share = Total dividends paid / Number of shares of common stock outstanding
Dividends per share = $4,500 / 19,000
Dividends per share = $0.24

2nd Year:
Total dividends paid = $6,300
Number of shares of common stock outstanding = 19,000
Dividends per share = Total dividends paid / Number of shares of common stock outstanding
Dividends per share = $6,300 / 19,000
Dividends per share = $0.33

3rd Year:
Total dividends paid = $42,680
Number of shares of common stock outstanding = 19,000
Dividends per share = Total dividends paid / Number of shares of common stock outstanding
Dividends per share = $42,680 / 19,000
Dividends per share = $2.25

4th Year:
Total dividends paid = $71,470
Number of shares of common stock outstanding = 19,000
Dividends per share = Total dividends paid / Number of shares of common stock outstanding
Dividends per share = $71,470 / 19,000
Dividends per share = $3.76

So, the dividends per share for each class of stock for each of the four years are as follows:

Preferred stock:
1st Year: $0.30
2nd Year: $0.42
3rd Year: $2.85
4th Year: $4.76

Common stock:
1st Year: $0.24
2nd Year: $0.33
3rd Year: $2.25
4th Year: $3.76