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Wallace Inc., a developer of radiology equipment, has stock outstanding as follows: 30,000
shares of cumulative preferred 2% stock, $90 parand 125,000 shares of $10 par common. During
its first four years of operations, the following amounts were distributed as dividends: first year,
$24,000; second year, $81,000; third year, $92,000; fourth year, $139,000.
Calculate the dividends 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, enter "0".
1st Year 2nd Year 3rd Year 4th Year
Preferred stock (dividend per share) $ $ $ $
Common stock (dividend per share) $ $ $ $
Solution
Dividend for preferred Stock will be Dividend*2%*90 or lower of dividend paid
Dividend to common will be total Dividend-Dividend Cumulative Preferred Shareholders
1=24000 2=81000 3-92000 4=139000
Preferred
Stock
(30000*2%*90)
or less of
24000/30000= $
.8 per share
30000/30000=$ 1 for
year 1 &
51000/30000=$1.7
for year 2 i.e. a total
of $ 2
3000/30000=.1 for
year 2 and
54000/30000=1.8 for
year 3, a total of $ 1.9
per share
54000/30000=1.8 per
share
Common
Stock
0 0
35000/125000=.28
per share(92000-
57000)
85000/125000=.68$
per share (139000-
54000)