Question

Dividends Per Share Lightfoot Inc., a software development firm, has stock outstanding as follows: 30,000 shares...

Dividends Per Share

Lightfoot Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative preferred 3% stock, $25 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, $8,700; second year, $14,100; third year, $79,280; fourth year, $139,920.

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) $ $ $ $

Homework Answers

Answer #1
1st Year 2nd Year 3rd Year 4th Year
Preferred stock (dividend per share) 0.29 0.47 1.49 0.75
Common stock (dividend per share) 0 0 0.91 3.09
Workings:
Annual Preferred dividends 22500 =30000*25*3%
1st Year:
Preferred stock (dividend per share) 0.29 =8700/30000
Arrear dividend 13800 =22500-8700
2nd Year:
Preferred stock (dividend per share) 0.47 =14100/30000
Arrear dividend 22200 =13800+(22500-14100)
3rd Year:
Preferred stock (dividend per share) 1.49 =(22200+22500)/30000
Common stock (dividend per share) 0.91 =(79280-44700)/38000
4th Year:
Preferred stock (dividend per share) 0.75 =22500/30000
Common stock (dividend per share) 3.09 =(139920-22500)/38000
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