Question

Dividends Per Share

Seacrest Company has 20,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $5 par common stock. The following amounts were distributed as dividends:

20Y1$40,000

20Y28,000

20Y360,000

Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

Preferred Stock
(dividends per share)Common Stock
(dividends per share)

20Y1$$

20Y2$$

20Y3$$

Answer 1

Annual preferred dividend = Number of preferred shares x Par value per preferred share x Preferred dividend rate

= 20,000 x 100 x 1%

= $20,000

Year	Total Dividends	Preferred Dividends	Common Dividends
2001	40,000	20,000	20,000
2002	28,000	20,000	8,000
2003	360,000	20,000	340,000

Calculation of Dividend Per Share
Year	Preferred stock	Common stock
2001	20,000/20,000= $1	20,000/50,000 = $0.40
2002	20,000/20,000= $1	8,000/50,000 = $0.16
2003	20,000/20,000= $1	340,000/20,000 = $17