A B Problem 13-1A Name Section: Score: 0% Instructions Answers are entered in th

Question

A B Problem 13-1A Name Section: Score: 0% Instructions Answers are entered in the cells with gray backgrounds Cells with non-gray backgrounds are protected and cannot be edited. An asterisk ()will appear to the right of an incorrect entry Enter a zero in cells you would otherwise leave blank istec tex he a e at me SUMMARY OF DIVIDENDS TotalFor the Years 2011-2016 TotalPreferred Dividends Common Dividends Total Total YearDividends 2011 2012 2013 2014 2015 2016 Total Per Share Per Share Average annual dividend Divided by market price per share Average retum on investment (percent)

Explanation / Answer

Firstly,we need to pay dividends on preferred stock and then we have to pay dividends on common stock.If any preference dividends are unpaid during the currentyear,it should be paid in next year before any devidend is paid during the next year.

Note:Preference dividend per share is calculated as follows= (unpaid pref dividend Paid during the year + Paid pref divi of Current year)/no of Preferred stock.

2)The average annual dividend for preferred stock = (0.64+1.92+2.24+1.6+1.6+1.6)/6 = $1.6% i.e 2% of $80.

common stock = (0+0+0.09+0.5+0.75+1)/6 =$0.39 per share

3) Average percentage return on preferred stock = ($1.6/$128) *100 = 1.25%

average percentage return for common stock = 0.39/7.8 *100 = 5%

The preference dividend to be paid per year = 25000*80*2% =40000 Common stock 100000 shares Preferred stock Common stock Year Total dividend Unpaid pref dividend at year beginning Total per share Total per share 2007 16000 0 16000 0.64 0 0 2008 48000 24000 24000 1.92 0 0 2009 65000 16000 40000 2.24 9000 0.09 2010 90000 0 40000 1.6 50000 0.5 2011 115000 0 40000 1.6 75000 0.75 2012 140000 0 40000 1.6 100000 1

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