Chp 13 Hw Pecan Theatre Inc. owns and operates movie theaters throughout Florida

Question

Chp 13 Hw Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $16,000; Year 2, $48,000; Year 3, S72,000; Year 4·$92,000: Year S, sl 12,000; and Year 6. $140,000. During the entre period ending December 31 of each year, the outstanding stock of the company was composed of 20,000 shares of cumulative, 2% preferred stock, 100 par, and 100,000 shares of common stock, $5 par. the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0 tear 6 140,000

Explanation / Answer

1)

2) Average annual dividend per share = Total dividend per share/ No. of years

Average Annual Dividend for Preferred stock = $12/6 = $2 per share

Average Annual Dividend for Common Stock = $2.4/6 = $0.4 per share

3) Average annual percentage return on initial shareholders' investment = Average Annual Dividend/Initial Share Price

Preferred stock = $2 / $174 = 1.15%

Common Stock = $0.4 / 10 = 4%

Preferred Dividends Common Dividends Total Dividends Total ($) Per Share ($) Total ($) Per Share ($) Year 1 $16,000 16,000 0.8 0 0 Year 2 $48,000 48,000 2.4 0 0 Year 3 $72,000 56,000 2.8 16,000 0.16 Year 4 $92,000 40,000 2 52,000 0.52 Year 5 $112,000 40,000 2 72,000 0.72 Year 6 $140,000 40,000 2 100,000 1 $12 $2.4

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