
Marc
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Year 1 $15,000
Preferred Dividends = 4% X $40 X 5,000 = $8,000 - Per Share amount is $8,000/5,000 = $1.60
Common Dividends = $15,000 - $8,000 = $7,000 - Per Share amount is $7,000/10,000 = $0.70
Year 2 $5,000
Preferred Dividends = 4% X $40 X 5,000 = $8,000 - But only $5,000 was paid, so there is a $3,000 carryover to Year 3 (the carry over is required due to the cumulative nature of the stock) - Per Share amount is $5,000/5,000 = $1.00
Common Dividends = $0 - Per Share amount is $0/10,000 = $0.00
Year 3 $62,000
Preferred Dividends = 4% X $40 X 5,000 = $8,000, plus the $3,000 carry over from Year 2.
Total Preferred Dividends = $8,000 + $3,000 = $11,000 - Per Share amount is $11,000/5,000 = $2.20
Common Dividends = $62,000 - $11,000 = $51,000 - Per Share amount is $51,000/10,000 = $5.10 |