Answer:
Pecan Theatre Inc.
Average annual percentage return
                               Cost    Market   20Y1   20Y2  20Y3  20Y4  20Y5  20Y6
                                  per share
Preferred stock   $20.00 $25.00    2%        2%       2%      2%      2%      2%
Common stock    $15.00  $17.50    0%         0%       0%   0.7%   0.8%   0.11%
Explanation:
a) Data and Calculations:
Dividends:                              Cumulative               Common Stock
                                          Preferred Stock               Dividends
                                     Dividends   Per share                   Per share
20Y1,     $80,000           $80,000   $0.40                 $0           $0
20Y2,    $90,000             90,000   $0.40                   0           $0
20Y3,   $150,000           150,000   $0.40                   0           $0
20Y4,   $150,000           100,000   $0.40              50,000      $0.10
20Y5,   $160,000           100,000   $0.40             60,000       $0.12
20Y6,   $180,000           100,000   $0.40             80,000       $0.16
Average annual percentage return
                               Cost    Market   20Y1   20Y2  20Y3  20Y4  20Y5  20Y6
                                  per share
Preferred stock   $20.00 $25.00    2%        2%       2%      2%      2%      2%
Common stock    $15.00  $17.50    0%         0%       0%   0.7%   0.8%   0.11%
Average annual percentage return = Dividend per share/Initial Cost per share