Question
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
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, $48,000; Year 2, $144,000; Year 3, $228,000; Year 4, $264,000; Year 5, $348,000; and Year 6, $420,000. During the entire period ending December 31 of each year, the outstanding stock of the company was composed of 30,000 shares of cumulative, 4% preferred stock, $100 par, and 100,000 shares of common stock, $10 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. If required, round your answers to two decimal places. If the amount is zero, please enter "0".
Preferred Dividends | Common Dividends | ||||||||||||||||||||
Year | Total Dividends | Total | Per Share | Total | Per Share | ||||||||||||||||
Year 1 | $ 48,000 | $fill in the blank 1 | $fill in the blank 2 | $fill in the blank 3 | $fill in the blank 4 | ||||||||||||||||
Year 2 | 144,000 | fill in the blank 5 | fill in the blank 6 | fill in the blank 7 | fill in the blank 8 | ||||||||||||||||
Year 3 | 228,000 | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 | ||||||||||||||||
Year 4 | 264,000 | fill in the blank 13 | fill in the blank 14 | fill in the blank 15 | fill in the blank 16 | ||||||||||||||||
Year 5 | 348,000 | fill in the blank 17 | fill in the blank 18 | fill in the blank 19 | fill in the blank 20 | ||||||||||||||||
Year 6 | 420,000 | fill in the blank 21 | fill in the blank 22 | fill in the blank 23 | fill in the blank 24 | ||||||||||||||||
$fill in the blank 25 | $fill in the blank 26 |
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 | $fill in the blank 27 per share |
Average annual dividend for common | $fill in the blank 28 per share |
3. Assuming a market price per share of $317 for the preferred stock and $14 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 | fill in the blank 29 % |
Common stock | fill in the blank 30 % |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started