Question

Dividends Per Share

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 20,000 shares of cumulative preferred 4% stock, $130 par, and 67,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $69,600; second year, $148,400; third year, $174,410; fourth year, $184,400.

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

Particulars				1st Year	2nd Year	3rd Year	4th Year
Preferred Dividend				$ 69,600.00	$ 138,400.00	$ 104,000.00	$ 104,000.00
No. of Preferred Stock outstanding				20000	20000	20000	20000
Preferred stock (dividend per share)				$           3.48	$             6.92	$             5.20	$             5.20

Particulars				1st Year	2nd Year	3rd Year	4th Year
Common Dividend				$               -	$   10,000.00	$   70,410.00	$   80,400.00
No. of Common Stock outstanding				67000	67000	67000	67000
Common stock (dividend per share)				$               -	$             0.15	$             1.05	$             1.20

Workings:

Face value of Outstanding Preferred Stock				$ 2,600,000.00	(20000 x $ 130)
Percentage of Dividend on such stock				4%
Amount of Preferred Dividend				$    104,000.00

	Particulars			1st Year	2nd Year	3rd Year	4th Year
	Dividend paid			$ 69,600.00	$ 148,400.00	$ 174,410.00	$ 184,400.00
Less:	Preferred Dividend			$ 69,600.00	$ 104,000.00	$ 104,000.00	$ 104,000.00
Less:	Preferred Dividends in Arrear
	of previous year			$               -	$   34,400.00	$                 -	$                 -
	Common Dividend			$               -	$   10,000.00	$   70,410.00	$   80,400.00