Michelangelo Inc., a software development firm, has stock outstanding as follows
ID: 2374050 • Letter: M
Question
Michelangelo Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative 2%, preferred stock of $25 par, and 38,000 shares of $125 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $5,700; second year, $8,100; third year, $66,160; fourth year, $133,940.
Calculate the dividends per share on each class of stock for each of the four years. Round all answers to the nearest cent. If no dividends are paid in a given year, enter "0".
Explanation / Answer
Preferred Stock will have = 2/100 * 25 = 0.5 / share
First year ;
(5700 - 0.5*3000)/68,000 = 0.0617
Common tock dividend = $0.0617
Preferred + 0.5 = $0.5617
Second Year:
(8100-1500)/68000 = 0.097 ;
Common stock = $ 0.097
Preferred stock = $0.597
Third Year :
(66,160-1500)/68000 = 0.95
Common = $0.95
Preferres = $1.45
Fourth year:
(133940-1500)/68000 = $1.95
common = $1.95
Preferred = $2.45