Dividends Per Share Michelangelo Inc., a software development firm, has stock ou

Question

Dividends Per Share Michelangelo Inc., a software development firm, has stock outstanding as follows: 15,000 shares of 4% preferred stock of $120 par, and 50,000 shares of $5 par common. During Its first four years of operations, the following amounts were distributed as dividends: first year, $48,300; second year, $66,900; third year, $99,000; fourth year, $147,000. 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

Dividend Paid: Year-1 Year-2 Year-3 Year-4 Preferred Dividend @4% on face value 72000 72000 Common Dividend 48300 66900 27000 75000 Total 48300 66900.00 99000 147000.00 Dividend per share Preferred 0.00 0.00 4.80 4.80 Common 0.97 1.34 0.54 1.50 Preferred Dividend = 15000 x 120 *4% = $72,000. So in a year if total dividend is less than 72,000 company did not paid preferred dividend.

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