Answer:
$1.06 per share
Explanation:
Calculation for dividend per share of common stock for board of directors of Midwest Foods
First step is to find the dividends due to the preferred shareholders
Dividends due to the preferred shareholders will be calculated as:
Using this formula
Total Dividend =Dividend- (Preferred stock *Per share of preferred stock )
Where,
Dividend=$3,500,000
Preferred stock =$300,000
Per share of preferred stock =$2.85
Let plug in the formula
Total Dividend =$3,500,000-($300,000*$2.85)
Total Dividend =$3,500,000-$855,000
Total Dividend =$2,645,000
The second step is to find Dividend per share of common stock
Using this formula
Dividend per share of common stock=Total dividend/Shares of common stock
Where,
Total dividend=$2,645,000
Shares of common stock=$2,500,000
Let plug in the formula
Dividend per share of common stock=$2,645,000/$2,500,000
Dividend per share of common stock=$1.06 per share
Therefore the dividend per share of common stock for board of directors of Midwest Foods will be $1.06 per share