Question

Dividends Per Share

Sandpiper Company has 30,000 shares of cumulative preferred 3% stock, $150 par and 50,000 shares of $20 par common stock. The following amounts were distributed as dividends:

Year 1	$337,500
Year 2	67,500
Year 3	405,000

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 '0'.

	Year 1	Year 2	Year 3
Preferred stock (Dividends per share)	$	$	$
Common stock (Dividends per share)	$	$	$

Answer 1

Solution

	1st Year	2nd Year	3rd Year
Preferred stock	$                    4.50	$                  2.25	$                  6.75
Common stock	$                    4.05	$                      -	$                  4.05

Working

	Par Value per Preferred share	Dividend rate	Dividend per preffred share	Number of preffered shares	Preffered Dividend
Annual Prefrred Dividend:	150	3.00%	$               4.500	30000	$         135,000.00
Year	Total Cash dividend Paid	Paid to Preferred	Paid to common	Dividends in arear at year-end
1	$       337,500.00	$     135,000.00	$ 202,500	$ 0
2	$         67,500.00	$       67,500.00	$ 0	$ 67,500
3	$       405,000.00	$     202,500.00	$ 202,500