Based on the preferred dividends, the dividends for preferred and common stock in each year are:
Preferred stock dividends:
- 20y1 - $3.00 per share.
- 20y2 - $1.20 per share.
- 20y3 - $4.80 per share.
Common stock dividends:
- 20y1 - $1.20 per share.
- 20y2 - $0 per share.
- 20y3 - $1.68 per share.
<h3>What are the preferred dividends?</h3>
Preferred shares have a specific dividend, and as these are cumulative shares, the dividends that are not paid in one year, will be paid in the next.
Dividends per year:
= 20,000 x 2% x 150
= $60,000
20y1 dividend per share:
= 60,000 / 20,000
= $3.00 per share
20y2 dividend per share:
= 24,000 / 20,000
= $1.20 per share
20y3 dividend per share:
The remaining dividend from 20y2 will have to be paid here:
= (60,000 + (60,000 - 24,000)) / 20,000
= 96,000 / 20,000
= $4.80 per share
<h3>What are the common dividends?</h3>
Preferred dividends are paid first:
Common dividends are:
= (Amount distributed as dividends - Preferred dividends) / Number of common shares
In 20y1:
= (120,000 - 60,000) / 50,000
= $1.20
In 20y2:
= (45,000 - 45,000) / 50,000
= $0 per share
In 20y3:
= (180,000 - 96,000) / 50,000
= $1.68 per share.
Find out more on preferred dividends at brainly.com/question/1416151.
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