Dividends on preferred and common stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 20Y1, $60,000; 20Y2, $80,000; 20Y3, $160,000; 20Y4, $160,000; 20Y $170,000; and 20Y6, $180,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 400,000 shares of cumulative, preferred 2% stock, $10 par, and 500,000 shares of common stock, $15 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round yo per share answers to two decimal places. If the amount is zero, please enter "0". Total Dividends $60,000 20Y2 80,000 2013 160,000 2014 160,000 20Y5 170,000 20Y6 Year 20Y1 180,000 Preferred Dividends Total Preferred Dividends Per Share Common Dividends Total Common Dividends Per Share 2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places. Average annual dividend for preferred per share Average annual dividend for common per share
Dividends on preferred and common stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 20Y1, $60,000; 20Y2, $80,000; 20Y3, $160,000; 20Y4, $160,000; 20Y $170,000; and 20Y6, $180,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 400,000 shares of cumulative, preferred 2% stock, $10 par, and 500,000 shares of common stock, $15 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round yo per share answers to two decimal places. If the amount is zero, please enter "0". Total Dividends $60,000 20Y2 80,000 2013 160,000 2014 160,000 20Y5 170,000 20Y6 Year 20Y1 180,000 Preferred Dividends Total Preferred Dividends Per Share Common Dividends Total Common Dividends Per Share 2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places. Average annual dividend for preferred per share Average annual dividend for common per share
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dividends on preferred and common stock
Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 20Y1, $60,000; 20Y2, $80,000; 20Y3, $160,000; 20Y4, $160,000; 20Y5,
$170,000; and 20Y6, $180,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 400,000 shares of cumulative, preferred 2% stock, $10 par, and 500,000 shares of common
stock, $15 par.
Required:
1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round your
per share answers to two decimal places. If the amount is zero, please enter "0".
Year
20Y1
20Y2
20Y3
20Y4
20Y5
20Y6
Total
Dividends
$60,000
80,000
160,000
160,000
170,000
180,000
Preferred
Dividends
Total
%
Preferred
Dividends
Per Share
%
Common
Dividends
Total
2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.
Average annual dividend for preferred
per share
per share
Average annual dividend for common
3. Assuming a market price per share of $25.00 for the preferred stock and $22.00 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share (a)
for preferred stock and (b) for common stock.
Round your answers to one decimal place.
Preferred stock
Common stock
Common
Dividends
Per Share
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