Dividends Per Share Michelangelo Inc., a software development firm, has stock ou
ID: 2481346 • Letter: D
Question
Dividends Per Share
Michelangelo Inc., a software development firm, has stock outstanding as follows: 10,000 shares of cumulative 1%, preferred stock of $25 par, and 13,000 shares of $50 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $1,000; second year, $1,300; third year, $15,470; fourth year, $37,470.
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 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) $ $ $ $Explanation / Answer
Annual Dividend to be paid to preferred stockholders = $25 x 10000 x 1% = $2500
years 1 2 3 4 total dividend paid $ 1,000 $ 1,300 $ 15,470 $ 37,470 Dividend to preferred shareholders $ 1,000 $ 1,300 $ 2,500 $ 2,500 Dividend accured to preferred shareholders $ 1,500 $ 1,200 Cumulative dividend accrued and paid to preferred stockholders $ 2,700 Total dividend paid to preferred stockholders $ 1,000 $ 1,300 $ 5,200 $ 2,500 Dividend to common stockholders (total dividend - dividend paid to preferred stockholders) $ 10,270 $ 34,970 Dividend per share of preferred stock (dividend paid by number of shares) $ 0.10 $ 0.13 $ 0.52 $ 0.25 Dividend per share of common stock (dividend paid by number of shares) $ - $ - $ 0.79 $ 2.69