1. Da Show Inc. owns and operates movie theaters throughout <?xml:namespace pref
ID: 2375410 • Letter: 1
Question
1. Da Show Inc. owns and operates movie theaters throughout <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Texas and California. Da Show has declared the following annual dividends over a six-year period: 2002, $18,000; 2003, $54,000; 2004, $70,000; 2005, $75,000; 2006, $80,000; and 2007, $90,000. During the entire period, the outstanding stock of the company was composed of 20,000 shares of cumulative, nonparticipating, 2% preferred stock, $100 par, and 25,000 shares of common stock, $10 par.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A. Calculate 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 on January 1, 2002. Summarize the data in tabular form, using the following column headings:
Total Preferred Dividends Common Dividends
Year Dividends Total Per Share Total Per Share
2002 $18,000
2003 54,000
2004 70,000
2005 75,000
2006 80,000
2007 90,000
B. Calculate the average annual dividend per share for each class of stock for the six-year period.
Explanation / Answer
Total Preferred Dividends Common Dividends
Year Dividends Total Per Share Total Per Share
2002 18000 0 0 18000 18/45
2003 40000 14000 14/25 54000 54/45
2004 40000 30000 30/25 70000 70/45
2005 40000 35000 35/25 75000 75/45
2006 40000 40000 40/25 80000 80/45
2007 40000 50000 2 90000 2
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