Question

Dividends Per Share Michelangelo Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative 3%, preferred stock of $30 par, and 38,000 shares of $75 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $10,200; second year, $14,400; third year, $90,980; fourth year, $144,420. Calculate 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) $ $ $ $

Answer 1

Solution:

Computation of dividend per share to Preferred and common shareholders
Year	Total Dividends (A)	Preferred dividend per year (B)	Preferred dividend paid ( C )	Preferred dividend in arrear (D) (B - C)	Preferred dividend per share (C/30000)	Common dividend paid ( E )(A - C)	Common dividend per share (E/38000)
1	$10,200.00	$27,000.00	$10,200.00	$16,800.00	$0.34	$0.00	$0.00
2	$14,400.00	$27,000.00	$14,400.00	$29,400.00	$0.48	$0.00	$0.00
3	$90,980.00	$27,000.00	$56,400.00	$0.00	$1.88	$34,580.00	$0.91
4	$144,420.00	$27,000.00	$27,000.00	$0.00	$0.90	$117,420.00	$3.09