Question

Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 80,600 shares of cumulative preferred 3% stock, $15 par, and 398,300 shares of $23 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $56,900 ; second year, $77,100 ; third year, $80,900 ; fourth year, $99,500 . 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) $ 0.45 $ 0.45 $ 0.45 $ 0.45 Common stock (dividends per share) $ $ $ $

Answer 1

• Workings

	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$                          15	3.00%	$                   0.450	80,600	$            36,270.00

	Total Cash Dividend paid	Paid to Preferred	Paid to Common	Dividends in Arrears at Year end
Year 1	$            56,900.00	$           36,270.00	$           20,630.00	$                          -
Year 2	$            77,100.00	$           36,270.00	$           40,830.00	$                          -
Year 3	$            80,900.00	$           36,270.00	$           44,630.00	$                          -
Year 4	$            99,500.00	$           36,270.00	$           63,230.00	$                          -
TOTAL	$          314,400.00	$        145,080.00	$        169,320.00	$                          -

• Answers

	1st year	2nd year	3rd year	4th year
Preferred Dividend:
Total	$              36,270.00	$          36,270.00	$         36,270.00	$        36,270.00
Dividend per share [Total / 80600 shares]	$                         0.45	$                    0.45	$                   0.45	$                   0.45
Common Stock Dividend:
Total	$              20,630.00	$          40,830.00	$         44,630.00	$        63,230.00
Dividend per share [Total / 398300 shares]	$                         0.05	$                    0.10	$                   0.11	$                   0.16