Answer:
Year 1, $24,000; Year 2, $72,000; Year 3, $108,000; Year 4, $138,000; Year 5, $168,000; and Year 6, $210,000.
30,000 shares of 2% preferred stock $100 par
100,000 shares of common stock $25 par
dividends distributed per preferred stock $2 x 30,000 stocks = $60,000
Year Year Year Year Year Year
1 2 3 4 5 6
total dividends 24,000 72,000 108,000 138,000 168,000 210,000
<u>distributed </u>
to preferred 24,000 72,000 84,000 60,000 60,000 60,000
<u>stocks </u>
per preferred 0.80 2.40 2.80 2 2 2
<u>stock </u>
to common 0 0 20,000 78,000 108,000 150,000
<u>stocks </u>
per common 0 0 $0.20 $0.78 $1.08 $1.50
<u>stock </u>
