You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend To help allay that fear, you compute the times preferred dividend earned ratio for the past three years from the following data taken from the firms financial statements Year 20X1 20X2 20X3 Operating income $ 13,000,000 $ 14,000,000 $ 19,000,000 Interest 4,900,000 4,500,000 9,000,000 Taxes 4,000,000 5,200,000 4,100,000 Preferred dividends 1,300,000 900,000 1,000,000 Common dividends 2,700,000 2,500,000 Round your answers to two decimal places 20X1 20X2 20X3 What does your analysis indicate about the firms capacity to pay preferred stock dividends Times preferred dividend earned has Select declinedincreasedItem 4 each year, which indicates the firm's capacity to pay the dividend has Select diminishedimprovedItem 5

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You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear,

You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear, you compute the times-preferred-dividend-earned ratio for the past three years from the following data taken from the firms financial statements:

Year		20X1		20X2		20X3
Operating income	$	13,000,000	$	14,000,000	$	19,000,000
Interest		4,900,000		4,500,000		9,000,000
Taxes		4,000,000		5,200,000		4,100,000
Preferred dividends		1,300,000		900,000		1,000,000
Common dividends		2,700,000		2,500,000

Round your answers to two decimal places.

20X1:

20X2:

20X3:

What does your analysis indicate about the firms capacity to pay preferred stock dividends?

Times preferred dividend earned has -Select-declinedincreasedItem 4 each year, which indicates the firm's capacity to pay the dividend has -Select-diminishedimprovedItem 5 .