Answer:
first year:
PS $0.45 CS none
second year
PS $0.75 CS 0.03
third year:
PS $0.60 CS 0.08
fourth year:
PS $0.60 CS 0.13
Explanation:
the preferred stock has preference over he common stock thus, they receive payment first:
80,000 x $20 x 3% = 48,000
<em>first year </em>36,000
all goes into preferred stock as is lower than 48,000 and 12,000 are carryfowards:
36,000 / 80,000 shares = 0.45 dividen per share
<em>second year</em> 72,000
we subtract 48,000 for the current year and add up the 12,000 arrears
which is 60,000 the rest goes for common stock:
$60,000 preferred dividneds/80,000 preferred shares = 0.75 per share
$ 12,000 common dividends / 400,000 common shares = 0.03 per share
<em>third year:</em>
80,000 - 48,000 =32,000 common dividends
$48,000 preferred dividneds/80,000 preferred shares = 0.60 per share
$ 32,000 common dividends / 400,000 common shares = 0.08 per share
<em>forth year:</em>
<em></em>
100,000 declared - 48,000 preferred = 52,000 common dividends
$48,000 preferred dividneds/80,000 preferred shares = 0.60 per share
$ 52,000 common dividends / 400,000 common shares = 0.13 per share
