Question

1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

Answer 1

Explanation:

1. determine are the total dividend and the per-share dividends declared on each class of stock for each of the six years as follow:

Particulars Preferred Dividends Common Dividends

Year Total Dividends Total Per Share Total Per Share

Year 1 $80,000 80000 0.32 0 0

Year 2 $90,000 90000 0.36 0 0

Year 3 $150,000 130000 0.52 20000 0.04

Year 4 $150,000 100000 0.4 50000 0.1

Year 5 $160,000 100000 0.4 60000 0.12

Year 6 $180,000 100000 0.4 80000 0.16

Total (a) 810000 600000 2.4 210000 0.42

Average (a/6 years) 0.4 0.07

2. Average annual dividend for preferred share is $0.40 per share and average annual dividend for common share is $0.07 per share.

3. The average annual percentage return on initial shareholders for preferred shareholder and common shareholders are 0.4% ($0.07/$17.50 x 100) and 1.6% ( $0.40/$25 x 100).