Chapter 13:

DividendsonPreferredandCommon Stock

Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $32,000; Year 2, $96,000; Year 3, $152,000; Year 4, $176,000; Year 5, $232,000; and Year 6, $280,000. During the entire period ending December 31 of each year, theoutstanding stockof the company was composed of 20,000 shares of cumulative, 4% preferred stock, $100par, and 100,000 shares of common stock, $20 par.

1.Assuming a market price per share of $333 for the preferred stock and $26 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share for preferred stock and for common stock.

Round your answers to two decimal places.

Preferred stock_______________%

Common stock_______________%