5. Anderson Company paid dividends at the end of each year as follows: 2012 $180

Question

5. Anderson Company paid dividends at the end of each year as follows:

2012 $180,000

2013 $260,000

2014 $600,000

Determine the amount of dividends per share paid on common and preferred stock for each year assuming independent capital structures as follows: A) Common: 300,000 shares of no- par common Preferred: 10,000 shares of $100 par, 9% noncumulative preferred

B) Common: 250,000 shares of no-par common Preferred: 20,000 shares of $100 par 9% noncumulative preferred

C) Common: 250,000 shares of no-par common Preferred: 20,000 shares of $100 par 9% cumulative preferred

D) Common: 250,000 shares of $1 par common Preferred: 30,000 shares of $100 par 9% cumulative preferred

Explanation / Answer

A) Common 300,000 shares; Preferred 10,000 shares noncumulative

B) Common 250,000 shares; Preferred 20,000 shares noncumulative

C) Common 250,000 shares; Preferred 20,000 shares cumulative

D) Common 250,000 shares: Preferred 30,000 shares cumulative

2012 2013 2014 Dividend per share Dividend per share Dividend per share 9% noncumulative preferred $ 9 $ 9 $ 9 Common stock $ 0.30 $ 0.57 $ 1.7

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