Dividends on Preferred and Common Stock Yosemite Bike Corp. manufactures mountai

Question

Dividends on Preferred and Common Stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike has declared the following annual dividends over a six-year period ended December 31 of each year: Year 1, $24,000; Year 2, $10,000; Year 3, $126,000; Year 4, $100,000; Year 5, $125,000; and Year 6, $125,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of common stock, $4 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "O

Explanation / Answer

1) Dividend distribution :

Annual preferred dividend = 25000*90*2% = 45000

2) Average annual dividend for preferred Stock = $1.80 per share

Average annual dividend for Common Stock = (0.25+0.55+0.80+0.80)/6 = $0.40 per share

3) Preferred stock = 1.80*100/100 = 1.8%

Common Stock = 0.40*100/5 = 8%

Total Preferred dividend Common Dividend Year Total Per share Total Per share 1 24000 24000 0.96 0 0 2 10000 10000 0.40 0 0 3 126000 101000 4.04 25000 0.25 4 100000 45000 1.80 55000 0.55 5 125000 45000 1.80 80000 0.80 6 125000 45000 1.80 80000 0.80 Total 510000 270000 240000

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---