Answer:
for 1st year dividend per equity share = $0.75
for 2nd year 0
for 3rd year dividend per equity share = $1.35
Explanation:
given data
share = 25000
cumulative preferred stock = 1%
par value = $150
share = 50000
common stock = $10
to find out
Determine the dividends per share for preferred and common stock for each year
solution
for 1st year
dividends amount Year 1 = $75,000
so total Preferred dividend to be paid = 150 × 1% × 25000
total preferred dividend = $37500
so dividend per share =
dividend per share = $1.5
so remaining dividend after payment of preferred dividend is
dividend after payment of preferred dividend = 75000 - 37500
dividend after payment of preferred dividend = $37500
so dividend per equity share will be
dividend per equity share =
dividend per equity share = $0.75
and
for 2nd year
dividends amount Year 2 = $30,000
and total preferred dividend = $37500
so dividend per share will be =
dividend per share = $1.2
so since the preferred stock cumulative dividend to be paid in next year due to less payment
remaining dividend = 30000 - 37500 = - 7500
so current yeas will be $ 0.3 per share or $7500
so remaining dividend is 0
and
for 3rd year
dividends amount Year 3 = $112,500
total dividend paid to preferred stock = 37500 + 7500 = $45000
so preferred dividend per share =
preferred dividend per share =- $1.8
remaining dividend = 112,500 - 45000 = $67500
so dividend per equity share =
dividend per equity share = $1.35