Dividends Per Share Lightfoot Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative preferred 3% stock, $25 par, and 38,000 shares of $75 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $8,700; second year, $14,100 third year, $72,440; fourth year, $116,740. Calculate the dividend per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, leave it blank.
Dividends Per Share Lightfoot Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative preferred 3% stock, $25 par, and 38,000 shares of $75 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $8,700; second year, $14,100 third year, $72,440; fourth year, $116,740. Calculate the dividend per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, leave it blank.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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
Transcribed Image Text:**Dividends Per Share Explanation**
Lightfoot Inc., a software development firm, has the following stock details:
- **Preferred Stock**:
- Shares: 30,000
- Type: Cumulative preferred with a 3% rate
- Par Value: $25 per share
- **Common Stock**:
- Shares: 38,000
- Par Value: $75 per share
Over the first four years of operations, Lightfoot Inc. distributed the following amounts as dividends:
- **1st Year**: $8,700
- **2nd Year**: $14,100
- **3rd Year**: $72,440
- **4th Year**: $116,740
**Task**: Calculate the dividend per share for each class of stock for each of the four years. Ensure that all answers are rounded to two decimal places. If no dividends are paid in a specific year, leave the space blank.
**Results Table**:
- **1st Year**:
- Preferred Stock: $0.29 per share (Correct)
- Common Stock: (No dividends)
- **2nd Year**:
- Preferred Stock: $0.47 per share (Correct)
- Common Stock: (No dividends)
- **3rd Year**:
- Preferred Stock: (No dividends, Incorrect Entry)
- Common Stock: (No dividends)
- **4th Year**:
- Preferred Stock: $0.75 per share (Correct)
- Common Stock: $2.48 per share (Correct)
This example illustrates how dividends are distributed among different classes of stock over several years, highlighting the treatment of preferred and common stocks.
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