Falrmount Inc., a developer of radiology equipment, has stock outstanding as fol

Question

Falrmount Inc., a developer of radiology equipment, has stock outstanding as folio r 000 shares of cumulative preferred 1% stock, $140 par, and 53,000 shares of $10 par common. During Its I .our years of operations, the following amounts were distributed as dividends: first year, $15,040; second year, $20,800; third year, $65,810; fourth year, $118,330. 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''. Preferred stock (dividend per share) Common stock (dividend per share)

Explanation / Answer

preference share holders are entitled to receive dividend from the available profits before the dividend is paid to equity share holders.

so, total cummulative 1% preference share capital = 16,000 * 140

= 22,40,000

so dividend payable to preference share holders per annum = 22,40,000 * 1%

= 22,400

preference dividend per share = 140 * 1%

= 1.4

1.81

total dividend 15040 20800 65810 118330 preference dividend (payable) 22400 29760 31360 22400 preference dividend per share (paid/no. of shares) 0.94 1.30 1.96 1.4 dividend paid to equity share holders 0 0 34450 95930 no. of equity shares 53000 53000 53000 53000 equity dividend per share 0 0 0.65

1.81

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