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: 20Y1, $32,000; 20Y2, $64,000; 20Y3, $152,000; 20Y4, $176,000; 20Y5, $232,000; and 20Y6, $280,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 40,000 shares of cumulative, preferred 2% stock, $100 par, and 100,000 shares of common stock, $25 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 20Y1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

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: 20Y1, $32,000; 20Y2, $64,000; 20Y3, $152,000; 20Y4, $176,000; 2015, $232,000; and 2016, $280,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 40,000 shares of cumulative, preferred 2% stock, $100 par, and 100,000 shares of common stock, $25 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 20Y1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share 20Y1 $ 32,000 32,000 $ 1.60 X $ 2092 64,000 64,000 3.20 X 20Y3 152,000 144,000 7.20 x 8,000 0.08 2014 176,000 80,000 4.00 104,000 X 1.04 2015 232,000 80,000 4.00 152,000 1.52 2016 280,000 80,000 4.00 X 200,000 2.00 $ 24.00 X $ 4.64 X Check My Work Next 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 4.00 X per share Average annual dividend for common $ 0.773 X per share 3. Assuming a market price per share of $130 for the preferred stock and $30 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 % Feedback Check My Work 1. Is the preferred stock cumulative or non-cumulative? How will preferred stock being cumulative or non-cumulative affect the distribution of dividends? Determine what amount of current dividends the preferred stock should receive per year. Recall the definition of dividends "in arrears". How much in dividends would each share of preferred stock receive each year? How much in dividends would each share of common stock receive each year? 2. Remember you are calculating the average per share for each class of stock, not in total. 3. What would the preferred and common stockholder receive as a return on their initial investment based on the average annual dividend