Dividends on Preferred and Common 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, $20,000; Year 2, $40,000; Year 3, $120,000; Year 4, $130,000; Year 5, $144,000; and Year 6, $160,000.

During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $100 par, and 100,000 shares of common stock, $20 par.

Required:

1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form.

Note: If required, round your answers to two decimal places. If the amount is zero, enter "0".

						Preferred Dividends								Common Dividends
Year		Total Dividends				Total				Per Share				Total				Per Share
Year 1		$ 20,000				$				$				$				$
Year 2		40,000
Year 3		120,000
Year 4		130,000
Year 5		144,000
Year 6		160,000
										$								$

2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.

Average annual dividend for preferred	$ per share
Average annual dividend for common	$ per share

3. Assuming a market price per share of $140 for the preferred stock and $13 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.

Use the rounded amounts from part 2 in future computations. And round your final answers to two decimal places.

Preferred stock	%
Common stock	%

Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and aperates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $20,000; Year 2, $40,000; Year 3, $120,0o0; Year $130,000; Year 5, $144,000; and Year 6, $160,000. Durina the entire period ended December 1 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred stock, $100 par, and 100,000 shares common stock, $20 par Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of t t the beginning of Year 1. Summarize the data in tabular form. vears. There were. dividends in arears Note: If required, round vour answers to two decimal places, If the amount is zero, enter "o Preferred Dividends Common Dividends Total Total Year Dividends Per Share Total Per Share 0.8 V 20,000 s 20.000 1.6 v 40,000 v Year 2 40,000 120.000 130,00C Year 5 144,000 Year 6 160,000 2. Determine the average annual dividend per share for each class of stock for the six-vear period, If required, round vour answers two decimal places Average annual dividend for preferred per share ner share Average annual dividend for common r preferred stock and for common stock. 3. Assuming a market price per share of $140 for he preferred stock and $13 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share e the rounded amounts from part 2 in future computations. And round your final answers to two decimal places Preferred stock Common stock Fedback