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, $80,000; Year 2, $90,000; Year 3, $150,000; Year 4, $150,000; Year 5, $160,000; and Year 6, $180,000. During the entire period ended December 31 of each year, theoutstanding stockof the company was composed of 250,000 shares ofcumulative preferred2% stock, $20par, and 500,000 shares of common stock, $15 par.

Required:

1.Determine the total dividends and the per-share dividends declared on each class ofstockfor each of the six years. There were no dividendsin arrearsat the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

Preferred DividendsCommon Dividends

YearTotal

Dividends

Total

Per Share

Total

Per ShareYear 1$80,000$$$$Year 290,000Year 3150,000Year 4150,000Year 5160,000Year 6180,000$$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$per shareAverage annual dividend for common$per share3.Assuming a market price per share of $25.00 for the preferred stock and $17.50 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share (A) for preferred stock and (B) for common stock.

Round your answers to two decimal places.

Preferred stock%Common stock%