Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has st
ID: 2526295 • Letter: D
Question
Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares of cumulative preferred 3% stock, $20 par, and 410,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $30,000; second year, $75,000; third year, $80,000; fourth year, $100,000. 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 dividends are paid in a given year, enter "o.00. 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividends per share) 0.5 Common stock (dividends per share) 0 Feedback ? Check My Work Is the preferred stock cumulative or non-cumulative stock? Determine what amount of current dividends that preferred stock should receive per year. Is the question asking for a per-share amount or total amount per class of stock? Learning Objective 2.Explanation / Answer
Dividend per share :
Annual preferred dividend = 60000*20*3% = 36000
1st year 2nd year 3rd year 4th year Preferred Stock( dividend per share) 30000/60000 = 0.50 42000/60000 = 0.70 36000/60000 = 0.60 36000/60000 = 0.60 Common Stock (dividend per share) 0 33000/410000 =0.08 44000/410000 = 0.11 64000/410000 = 0.16