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Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 22,000 shares of cumulative...

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 22,000 shares of cumulative preferred 1% stock, $120 par, and 73,000 shares of $5 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $17,600; second year, $45,200; third year, $73,460; fourth year, $127,870.

Compute 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".

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Expert Solution

1st Year 2nd Year 3rd Year 4th Year
Preferred Dividend $120*1%*22,000 = $26,400 $120*1%*22,000 = $26,400 $120*1%*22,000 = $26,400 $120*1%*22,000 = $26,400
Preferred Dividend paid $                                        17,600 $8,800+$26,400 = $35,200 $                                        26,400 $                                         26,400
Preferred dividend carreid forward $26,400 - $17,600 = $8,800 $                                                     - $                                                    - $                                                    -
Dividend available for common stock $                                                    - $45,200 - $35,200 = $10,000 $73,460-$26,400 = $47,060 $127,870-$26,400 = $101,470
Dividend per share (Preferred stock) ($120*1%) 1.20 1.20 1.20 1.20
Dividend per share (Common stock) 0 $10,000/73,000 = $0.14 $47,060/73,000 = $0.64 $101,470/73,000 = $1.39

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ekkarill92 answered 2 years ago
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