Sabas Company has 44,000 shares of $100 par, 4% preferred stock and 118,000 shares of $50...

Sabas Company has 44,000 shares of $100 par, 4% preferred stock and 118,000 shares of $50 par common stock issued and outstanding. The following amounts were distributed as dividends:

Year 1:$552,000

Year 2:441,000

Year 3:584,000

Determine the dividends per share for preferred and common stock for each year. If required, round your answers to two decimal places.

Dividends per shareYear 1Year 2Year 3

Preferred stock$$$

Common stock$$$

Solutions

Expert Solution

Dividend Per Share	Year 1	Year 2	Year 3
Preferred Stock	$ 4.00	$ 4.00	$ 4.00
Common stock	$ 3.19	$ 2.25	$ 3.46

Explanations ;-

Preferred Dividend= 44000 * $100 * 4% = $176000

	Year 1	Year 2	Year 3
Total dividends declared (a)	$ 552,000	$ 441,000	$ 584,000
Preferred Dividend (For Current year) (b)	$ 176,000	$ 176,000	$ 176,000
Comon dividend (c) = (a) - (b)	$ 376,000	$ 265,000	$ 408,000
Dividend Per Share
Preferred Stock (b ÷ 44000 shares)	$ 4.00	$ 4.00	$ 4.00
Common stock (e ÷ 118000 shares)	$ 3.19	$ 2.25	$ 3.46

ekkarill92 answered 1 year ago

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