Question

Dividends Per Share

Oceanic Company has 25,000 shares of cumulative preferred 3% stock, $50 par and 50,000 shares of $10 par common stock. The following amounts were distributed as dividends:

Year 1	$56,300
Year 2	15,000
Year 3	112,500

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'.

	Preferred Stock (dividends per share)	Common Stock (dividends per share)
Year 1	$	$
Year 2	$	$
Year 3	$	$

Answer 1

	Number of Shares	Par value	Total value	Dividend per year
Cumulative Preferred 3% stock	25,000	50	1,250,000	37,500
Common Stock	50,000	10	500,000
	Total Dividend	Preferred stock	Common Stock
Dividend Allocated	Per share	Dividend Allocated	Per share
Year 1	56,300	37,500	1.50	18,800	0.38
Year 2	15,000	15,000	0.60	0	0.00
Year 3	112,500	60,000	2.40	52,500	1.05
Note:
1) In Year 2, there is no sufficient dividend for preferred shareholders, so total distributed dividend given to preferred shareholders I.e. $15,000 instead of $.37,500.
2) In Year 3, in addition to Year 3 preferred dividend, balance payable in Year 2 (37,500-15,000) - $ 22,500 is paid Year 3.