Please help with this question Chapter 13 Ex 13-1 Algo nmentM -true eBook Show M

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Please help with this question
Chapter 13 Ex 13-1 Algo

nmentM -true eBook Show Me How Calculator Dividends Per Share Fairmount Inc., a developer of radiology equipment, has stock outstanding as follows: 15,000 shares of cumulative preferred 2% stock, $160 par, and 50,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $32,100; second year, $44,700; third year, $88,700; fourth year, $108,000. Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no divi are paid in a given year, enter "O" 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividend per share) 0 0 Common stock (dividend per share)

Explanation / Answer

1st year

$32,100 paid

Preferred - $32,100/15000 = $2.14

Dividend in arrears = $48,000-$32,100= $15,900

Common = 0 dividend paid

2nd year

$44,700 paid

Preferred - $44,700/15000 = $2.98

Dividend in arrears - $48,000-$44,700+$15,900 =$19, 200

Common = 0 dividend

3rd year

$88,700 paid

Preferred - $48,000+$19,200/15000 = $4.48

Common - $88,700-$67,200/50,000 = $0.43

4th year

$108,000 paid

Preferred - $48,000/15000 = $3.2

Common - $108,000-$48,000/50000 = $1.2

1st year 2nd year 3rd year 4th year Preferred stock $2.14 $2.98 $4.48 $3.2 Common stock 0 0 $0.43 $1.2

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