w my applic X PRACTICE: CHAPTER 9 HW X CengageNOWV2 Online Cengage Learning RakeAssignment/takeAssignment Main.do?invoker=&takeAssignmentSessionLocator=&inprogress-false x + - eBook Calculator Dividends Per Share Lightfoot Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative preferred 39 stock, $25 par and 38,000 shares of $50 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, $72,820; fourth year, $118,260. 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 "o". 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividend per share) 0.30 1.99 x Common stock (dividend per share) 1.00 X

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Answer

Particulars. Year1. Year2. Year3 Year4

Preferred Stock (divident per share) 0.29 0.47 1.49 0.75

Common stock (divident per share). 0.0 0.0 0.74 2.52

Calculation

given that company has 30000 Cumulative preferance shares 3% with par $25

Cumulative preference shares means Cumulative preferred stock is a type of preferred stock with a provision that stipulates that if any dividend payments have been missed in the past, the dividends owed must be paid out to cumulative preferred shareholders first.

Company required to pay divident for preference shareholders each year =30000×25×3%=22500

Year1.

= Divident paid /number of shares =8700/30000. =0.29

Divident needed to pay to preference shareholders=22500-8700. =13800

Year2. =Divident paid/number of shares. =14100/30000

= 0.47

Divident needed to pay to preference shareholders =13800+22500-14100.

=22200

Year3. Divident paid/number of shares =(22200+22500)/30000. = 1.49

Divident needed to pay. = 0

Year4. Divident paid/number of shares.

= 22500/30000

= 0.75

Common stock (divident per share)

Year1 Divident paid to common stockholders/number of shares. =0/38000

Year2. Divident paid to common stockholders/number of shares. =0/38000

Year3. Divident paid to common stockholders/number of shares

Divident paid to common stockholders= total divident paid - divident paid to preference shareholders =72820 - 44700 =28120

=28120/38000

=0.74

Year4 divident paid to common stockholders/number of shares

=118260-22500

=95760 paid to common stockholders

=95760/38000

=2.52

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