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) \$ \$ \$ \$

 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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