Scan Tech Inc., a developer of radiology equipment, has stock outstanding as fol
ID: 2422917 • Letter: S
Question
Scan Tech Inc., a developer of radiology equipment, has stock outstanding as follows: 24,000 shares of 2% preferred stock of $75 par, and 100,000 shares of $8 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $19,200; second year, $30,000; third year, $75,000; fourth year, $120,000. Their preferred stock is non-accumulating nor non-cumulative stock.
1st Year 2nd Year 3rd Year 4th Year Preferred (per share) $ $ $ $ Common (per share) $ $ $ $Explanation / Answer
39,000/100,000=
.39
84,000/100,000
=.84
total dividend to preferred shareholders is 75@2% = 1.5 *24,000 = $36,000
1 2 3 4 Preferred(per share) 19,200/24,000 = .80 30,000/24,000 = 1.25 1.50 1.50 Common (per share)39,000/100,000=
.39
84,000/100,000
=.84