la eBook Dividends Per Share Michelangelo Inc a software dev

.la eBook Dividends Per Share Michelangelo Inc., a software development firm has stock outstanding as follows: 10,000 shares of cumulative i%, preferred stock of $25 par, and 13,000 Calculato shares of $125 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $1,000; second year, 1,300; third year, $15,990; fourth year, $39,160. 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 \" 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividend per share) Common stock (dividend per share)

Solution

Answer

As we know that the Preferred Stock is cumulative, so if a company is nt able to pay dividend to Preference Shareholders than there dividend will be collected i.e. Carry forward and will be paid in future (i.e. Old and New ).

Preference Dividend per year = 1% * (10,000 shares * $25)

Preference Dividend = $2,500 per year

Dividend Per share = Dividend Paid / No. of Shares

1st Year

2nd Year

3rd Year

4th Year

Preference Dividend Due

2,500

4,000(1500 Last Year + 2500 Current Year)

5,200 (2700 Last Year + 2500 Current Year

2,500

Preferred Dividend Paid

1,000

1,300

5,200

2,500

Preferred Stock (Dividend Per share)

$0.10

($1,000/10,000)

$0.13

($1,300/10,000)

$0.52

($5,200/10,000)

$0.25

($2,500/10,000)

Common Share Dividend

-

-

10,790

(15990 - 5,200)

36,660

(39160 -2,500)

Common Stock (Dividend Per share)

-

             -

$0.83

($10,790 /13,000)

$2.82

($36,660/13,000)

	1st Year	2nd Year	3rd Year	4th Year
Preference Dividend Due	2,500	4,000(1500 Last Year + 2500 Current Year)	5,200 (2700 Last Year + 2500 Current Year	2,500
Preferred Dividend Paid	1,000	1,300	5,200	2,500
Preferred Stock (Dividend Per share)	$0.10 ($1,000/10,000)	$0.13 ($1,300/10,000)	$0.52 ($5,200/10,000)	$0.25 ($2,500/10,000)
Common Share Dividend	-	-	10,790 (15990 - 5,200)	36,660 (39160 -2,500)
Common Stock (Dividend Per share)	-	-	$0.83 ($10,790 /13,000)	$2.82 ($36,660/13,000)