[titcomb1956]

Company has $10,00 shares of 2 % cumulative preferred stock of $50 par and 25,000 share of $100 par common stock. What would the preferred and common stock be for year one at $18,000 Year 2 at $7,500 and Year 3 at 35,000

[rehmanvohra]

Please recheck your question. It is not clear.

[pready]

First you will have to determine the amount of dividends for the preferred shares, so you can subtract this amount from your total dividends.

For Preferred shares simply take the number of Preferred shares times the percentage rate times the par value to get your Preferred dividends.

Now subtract the Preferred dividends amount from your total dividends to get your dividends for Common Shares.

Now simply take your dividends for Common Shares and divide it by the number of common shares issued and outstanding to get your dividends per common share.

You need to do this for all three years. Note: Preferred Dividends will be the same every year.

In year 2 you will not have enough to pay the total amount of Preferred dividends, so the difference between the Preferred Dividends amount minus the amount of dividends paid will be paid in year 3. so in year 3 you will have to subtract the yearly Preferred Dividends amount and subtract the difference from the year 2 dividends.