Andrews Company has $80,000 available to pay dividends. It has 2,000 shares of 10%, $100 par, preferred stock and 30,000 shares of $10 par common stock outstanding. The preferred stock is selling for $125 per share, and the common stock is selling for $20 per share.

Preferred stock is fully participating and cumulative. Preferred dividends are 1 year in arrears at the beginning of the year.

	Preferred	Common
Dividend in Arears	20,000	0
Current preferred dividends	20,000
common proportional share	0	30,000
Remainder
Total

For 1(a), compute the dividend yield on the preferred stock and the common stock.

	Dividend yield
Preferred stock	%
Common stock