Question

Seventy-Two Inc., a developer of radiology equipment, has Shares of ownership of a corporation.stock outstanding as follows: 80,000 shares of cumulative preferred 3% stock, $20 A dollar amount assigned to each share of stock.par and 400,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $36,000; second year, $72,000; third year, $80,000; fourth year, $100,000.

Answer 1

Year	1	2	3	4
Preferred stock (dividend per share)	0.45	0.75	0.6	0.6
Common stock (dividend per share)	0	0.03	0.08	0.13

Workings

Year 1
Preferred stock
Dividend Declared	36000
preferred Dividend =80000*20*0.03	48000
Dividend Distributed to preferred share holder	36000
Dividend Arrear 48000-36000	12000
Dividend Per Share preferred shareholder 36000/80000	0.45
Common stock
Dividend to common stock holder	0
Dividend Per Share to common stock holder	0
Year 2
Preferred stock
Dividend Declared	72000
preferred Dividend =80000*20*0.03	48000
Dividend Arrear previous year	12000
Dividend Distributed to preferred share holder 48000+12000	60000
Dividend Arrear current year	0
Dividend Per Share preferred shareholder 60000/80000	0.75
Common stock
Dividend to common stock holder 72000-60000	12000
Dividend Per Share to common stock holder	0.03
Year 3
Preferred stock
Dividend Declared	80000
preferred Dividend =80000*20*0.03	48000
Dividend Arrear previous year	0
Dividend Distributed to preferred share holder	48000
Dividend Arrear current year	0
Dividend Per Share preferred shareholder 48000/80000	0.60
Common stock
Dividend to common stock holder 80000-48000	32000
Dividend Per Share to common stock holder 32000/40000	0.08
Year4
Preferred stock
Dividend Declared	100000
preferred Dividend =80000*20*0.03	48000
Dividend Arrear previous year	0
Dividend Distributed to preferred share holder	48000
Dividend Arrear current year	0
Dividend Per Share preferred shareholder 48000/80000	0.60
Common stock
Dividend to common stock holder 100000-48000	52000
Dividend Per Share to common stock holder 52000/40000	0.13