Dividends per Share

Question

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares of cumulative preferred 3% stock, $20 par and 405,000 shares of $25 par common.

During its first four years of operations, the following amounts were distributed as dividends: first year, $32,000; second year, $73,000; third year, $100,000; fourth year, $120,000.

Determine 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 "0.00".

Answer 1

simply take the dollar amount of dividends paid and divide by the corresponding amount of shares (405,000 for common and 60,000 for the Preferred)

Feel free to contact me with any related financial or accounting questions

Neil

Answer 2

Dividend Per Share (Preferred Stock / Common Stock):

1st Year: $0.53 ($32,000/60,000) / $0.00

2nd Year: $0.67 ($40,000/60,000) / $0.08 ($33,000/4,05,000)

3rd Year: $0.60 ($36,000/60,000) / $0.16 ($64,000/4,05,000)

4th year: $0.60 ($36,000/60,000) / $0.21 ($84,000/4,05,000)