To calculate the dividends per share for both preferred and common stock for each year, we need to first determine the total dividends owed to preferred stockholders and then allocate any remaining dividends to common stockholders.
Step 1: Calculate Total Preferred Dividends
The preferred stock is cumulative with a 1% dividend on a par value of $150. The total amount of preferred stock is 15,000 shares.
Annual preferred dividend = Number of preferred shares × Par value per share × Dividend rate \[ \text{Annual preferred dividend} = 15,000 , \text{shares} \times $150 \times 0.01 = $22,500 \]
Step 2: Analyze Each Year
Year 20Y1: $45,000 distributed
- Preferred dividends owed: $22,500
- Remaining for common stock: $45,000 - $22,500 = $22,500
Dividends per share:
- Preferred: \[ \text{Dividends per share} = \frac{22,500}{15,000} = $1.50 \]
- Common: \[ \text{Dividends per share} = \frac{22,500}{50,000} = $0.45 \]
Year 20Y2: $9,000 distributed
- Preferred dividends owed: $22,500
- Preferred received: $9,000
- Remaining for common stock: $0 (as preferred stock didn't get fully paid)
Dividends per share:
- Preferred: \[ \text{Dividends per share} = \frac{9,000}{15,000} = $0.60 \]
- Common: \[ \text{Dividends per share} = 0 \]
Year 20Y3: $67,500 distributed
- Preferred dividends owed: $22,500 (for 20Y2 carryover and current)
- Preferred dividends total owed (20Y1 and 20Y2 unpaid): $22,500 + $22,500 = $45,000
- Preferred received in 20Y3: $22,500
- Remaining for common stock: $67,500 - $22,500 = $45,000
Dividends per share:
- Preferred: \[ \text{Dividends per share} = \frac{22,500}{15,000} = $1.50 \]
- Common: \[ \text{Dividends per share} = \frac{45,000}{50,000} = $0.90 \]
Summary of Dividends Per Share:
| Year | Preferred Stock (dividends per share) | Common Stock (dividends per share) | |------|---------------------------------------|-------------------------------------| | 20Y1 | $1.50 | $0.45 | | 20Y2 | $0.60 | $0 | | 20Y3 | $1.50 | $0.90 |
Final Answers:
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Year 20Y1 Preferred Stock: $1.50
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Year 20Y1 Common Stock: $0.45
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Year 20Y2 Preferred Stock: $0.60
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Year 20Y2 Common Stock: $0.00
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Year 20Y3 Preferred Stock: $1.50
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Year 20Y3 Common Stock: $0.90