Question

Dividends Per Share Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 11,000 shares of cumulative preferred 3% stock, $120 par, and 37,000 shares of $10 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $26,510; second year, $62,690; third year, $70,980; fourth year, $82,890. Compute 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".

Answer 1

Answer:

Dividend per share = Total ordinary dividend

                                     No of common stock outstanding    

Year 1

Dividend per share = $26,510

                                   37,000 shares

                                = $0.72 per share

Year 2

Dividend per share =     $62,690

                                        37,000 shares

                                 = $1.69

Year 3

Dividend per share = $70,980

                                    37,000  shares  

                                =$1.92

Year 4

Dividend per share = $82,890  

                                     37,000 units    

                                  = $2.24                                                                                                                                                                                                                                                                      

Explanation:

Dividend per share is the relationship between total ordinary dividend and number of common stock outstanding.