Seventy-two inc., a developer of radiology equipment, has stock outstanding as follows: 80,000 shares of cumulative preferred 3% stock, $20 par and 400,000 shares of $25 par common. during its first four years of operations, the following amounts were distributed as dividends: first year, $36,000; second year, $72,000; third year, $80,000; fourth year, $100,000. determine the dividends per share on each class of stock for each of the four years.

1st year:

preferred stock 0.45

2nd Year:

preferred 0.75

common 0.03

3rd Year:

preferred 0.48

common 0.08

4th Year:

preferred 0.48

common 0.13

Explanation:

80,00 x 3% x $20 = 48,000

First year:

36, 000 preferred stock

36,000 / 80,000 = 0.45

Second Year

72, 000 - 48,000 - 12,000 = 12,000 common stock

60,000 preferred stock

DPS preferred 60,000/80,000 = 0.75

common 12,000/400,000 = 0.03

Third Year

80, 000

DPS preferred 48,000 preferred/80,000 = 0.6

DPS common 32,000 common/400,000 = 0.08

Fourth Year:

100,000

DPS preferred 48,000 preferred/80,000 = 0.6

DPS common 52,000 common/400,000 = 0.13

answer; 20% is your answer;