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15 August, 02:11

Sabas Company has 20,000 shares of $100 par, 1% non-cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:

Year 1: $10,000

Year 2: 15,000

Year 3: 90,000

Determine the dividends per share for preferred and common stock for each year

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  1. 15 August, 04:53
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    Year 1 Year 2 Year 3

    Preferred stock (A : C) $0.50 $0.75 $1

    Common stock (B : D) $0 $0 $0.70

    Explanation:

    The computations are shown below:

    Preferred shares = 20,000 shares (C)

    Common stock shares = 100,000 shares (D)

    Preferred dividend = 20,000 shares * $100 * 1% = $20,000

    Particulars Year 1 Year 2 Year 3

    Total dividend $10,000 $15,000 $90,000

    Preference dividend (A) $10,000 $15,000 $20,000

    Common shares $0 $0 $70,000

    dividend (B)

    Dividend per share = (Total dividend) : (number of shares)

    Preferred stock (A : C) $0.50 $0.75 $1

    Common stock (B : D) $0 $0 $0.70
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