Imaging Inc., a developer of radiology equipment, has stock outstanding as follo

Question

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 23,000 shares of cumulative preferred 4% stock, $150 par, and 77,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $92,460; second year, $193,540; third year, $240,940; fourth year, $270,440. Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0". 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividend per share) $ $ $ $ Common stock (dividend per share) $ $ $ $

Explanation / Answer

Dividend on preferred shares 23,000*4%*150 138000 First year dividend to preferred stock = 92460/23000 4.02 per share Second year Dividend to preferred shareholders Arrear in dividend (138000-92460)= 45540 Dividend to preferred shareholders 138,000 total dividend to preferred shareholders 183540 dividend per share = 183540/23000 7.98 Dividend to common shareholders (193540-183540) 10000 0.13 Third year dividend to preferred shareholders = 138000/23000 6 dividend to common shareholders = (240,940 - 138000)/77000 1.34 Fourth year Dividend to preferred shareholders = $6 per share dividend to common shareholders = (270,440-138000)/77000 1.72 preferred Common dividend dividend per share per share First year 4.02 0 second year 7.98 0.13 third year 6 1.34 Fourth year 6 1.72

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