Question

# Dividends Per Share Lightfoot Inc., a software development firm, has stock outstanding as follows: 25,000 shares...

Dividends Per Share

Lightfoot Inc., a software development firm, has stock outstanding as follows: 25,000 shares of cumulative preferred 3% stock, \$25 par, and 31,000 shares of \$100 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, \$7,250; second year, \$11,750; third year, \$65,150; fourth year, \$113,610.

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 \$ 0.9 \$ 3.06

Preferred stock has to get paid first and since cumulative paid up25000*25*0.03=\$18750 for preferred dividend or \$ 0.75 per share.

For the 1st year preferred gets \$ 0.29(\$7250/25000) and 0 for Common

For the 2nd year preferred gets \$ 0.47(\$ 11750/25000) and 0 for Common

For the 3rd year preferred gets \$ 0.46 from year1 +\$ 0.28 from year 2+\$ 0.75=\$ 1.49 and for Common it is \$ 0.9 (\$27900/31000).

For the 4th year preferred gets 0.75 and for Common it is \$ 3.06(\$ 94860/31000)

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