Question

Dividends Per Share

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 11,000 shares of cumulative preferred 4% stock, $150 par, and 37,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $44,220; second year, $97,780; third year, $116,080; fourth year, $131,860.

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".

	1st Year	2nd Year	3rd Year	4th Year
Preferred stock (dividend per share)	$	$	$	$
Common stock (dividend per share)	$	$	$	$

Answer 1

Cash Dividend = The amount of cash provided by a company out of its distributable profits to its shareholders as a return for the amount invested is Cash Dividends.

Common Stock = These are the ordinary shares that the company issues to the investors in order to raise funds. In return, they receive dividends but they are not guaranteed and are paid after the payment made to the preferred shareholder's.

Preferred Stock = The stock that provides a fixed amount of dividends to its stockholders before paying dividends to common shareholders. Preferred stock may be cumulative or non-cumulative. The cumulative preferred stock means that preferred stockholder is entitled to receive dividends for the current year plus any unpaid dividends for the previous year before the dividends are paid to common shareholders.

Dividend per share = It is the amount of dividend paid to each shareholder.