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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". Total Year Dividends 20Y1 $60,000 20Y2 80,000 20Y3 160,000 20Y4 160,000 20Y5 170,000 20Y6 180,000 Preferred stock Preferred Dividends Total Common stock $ 60,000 80,000 100,000 80,000 80,000 80,000 4.8 X % Preferred Dividends Per Share 3 X % 0.15 $ 0.2 0.25 0.2 0.2 0.2 1.2 $ Common Dividends Total 0 0 60,000 80,000 90,000 100,000 $ Common Dividends Per Share 0 0 0.12 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 1.20 X per share 0.66 X 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. 0.16 0.18 0.2 0.66

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". Total Year Dividends 20Y1 $60,000 20Y2 80,000 20Y3 160,000 20Y4 160,000 20Y5 170,000 20Y6 180,000 Preferred stock Preferred Dividends Total Common stock $ 60,000 80,000 100,000 80,000 80,000 80,000 4.8 X % Preferred Dividends Per Share 3 X % 0.15 $ 0.2 0.25 0.2 0.2 0.2 1.2 $ Common Dividends Total 0 0 60,000 80,000 90,000 100,000 $ Common Dividends Per Share 0 0 0.12 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 1.20 X per share 0.66 X 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. 0.16 0.18 0.2 0.66

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 5P
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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". Total Year Dividends 20Y1 $60,000 20Y2 80,000 20Y3 160,000 20Y4 160,000 20Y5 170,000 20Y6 180,000 Preferred stock Preferred Dividends Total Common stock 60,000 80,000 100,000 80,000 80,000 80,000 4.8 X % $ 3 X % Preferred Dividends Per Share 0.15 $ 0.2 0.25 0.2 0.2 0.2 1.2 Common Dividends Total 0 0 60,000 80,000 90,000 100,000 Common Dividends Per Share 1.20 X per share 0.66 X per share 0 0 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 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. 0.12 0.16 0.18 0.2 0.66
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". Total Year Dividends 20Y1 $60,000 20Y2 80,000 20Y3 160,000 20Y4 160,000 20Y5 170,000 20Y6 180,000 Preferred stock Preferred Dividends Total Common stock 60,000 80,000 100,000 80,000 80,000 80,000 4.8 X % $ 3 X % Preferred Dividends Per Share 0.15 $ 0.2 0.25 0.2 0.2 0.2 1.2 Common Dividends Total 0 0 60,000 80,000 90,000 100,000 Common Dividends Per Share 1.20 X per share 0.66 X per share 0 0 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 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. 0.12 0.16 0.18 0.2 0.66
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