# Dividends per share Zero Calories Company has 16,000 shares of cumulative preferred 1% stock, $40 par, and 80,000 shares of$150 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for each year.

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Chapter
Section

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 13, Problem 1PEB
Textbook Problem
3 views

## Dividends per shareZero Calories Company has 16,000 shares of cumulative preferred 1% stock, $40 par, and 80,000 shares of$150 par common stock. The following amounts were distributed as dividends:Determine the dividends per share for preferred and common stock for each year.

To determine

Calculate the dividends per share for preferred and common stock for each year.

### Explanation of Solution

Cash dividends: The amount of cash provided by a corporation out of its distributable profits to its shareholders as a return for the amount invested by them is referred as cash dividends.

Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation. The dividend payments are not guaranteed and are paid after the payment made to the preferred stockholders.

Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.

A preferred stock may be cumulative and non-cumulative. A cumulative preferred stock implies that a preferred stockholder is entitled to receive dividends for the current year plus any unpaid dividends of the previous years, before the dividends paid to the common stockholders.

Dividend per share: Dividend per share represents the amount of dividend paid to each shareholders of the business.

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

 Particulars Year 1 Year 2 Year 3 Amount distributed $21,600$4,000 $100,800 Preferred dividend$6,400 $4,000$8,800 Common dividend $15,200$0 $92,000 Dividend per share: Â Â Â Preferred stock (PreferredÂ dividend16,000Â preferenceÂ shares)$0.40 $0.25$0.55 Â Â Â  Common stock (CommonÂ dividend80,000Â commonÂ shares) $0.19 None$1

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Find more solutions based on key concepts
Explain how corporate profits are taxed twice.

Principles of Economics (MindTap Course List)

How does the rate of population growth influence the level of GDP per person?

Brief Principles of Macroeconomics (MindTap Course List)

What three steps are involved in delegation? Explain each.

Foundations of Business (MindTap Course List)

Why is productivity important?

Essentials of Economics (MindTap Course List)

What is the purpose of depreciation?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

How does a cost-efficient capital market help reduce the prices of goods and services?

Fundamentals of Financial Management (MindTap Course List)

A firm is about to double its assets to serve its rapidly growing market. It must choose between a highly autom...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is a base year?

Economics (MindTap Course List)