If I have stock outstanding of 100,000 shares of 2% cumulative, nonparticipating preferred stock of $20 par, and 50,000 share of $100 par common, how do I calculate the dividends per share?

karenbu2

I'll answer my own question. You take $20 par x 2% which gives you .40 cents per share for the cumulative, nonparticipating preferred stock. The common stock is figured after the preferred stock gets its cut of the dividend. For example, if the dividend amount was $180,000 for the year preferred stock would get $40,000 of it (.40 x 100,000) and the amount left over of $140,000 would be divided up among the common stock by taking $140,000/$50,000 equaling $2.80.