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OBJ. 3 PR 13-1B Dividends on preferred and common stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike Corp. has declared the following annual dividends over a six-year period ended December 31 of each year: 2009, $24,000; 2010, $10,000; 2011, $126,000; 2012, $100,000; 2013, $125,000; and 2014, $125,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of com- mon stock, $4 par. Instructions 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 on January 1, 2009. Summarize the data in tabular form, using the following column headings: Year 2009 2010 2011 2012 2013 2014 Total Dividends $ 24,000 10,000 126,000 100,000 125,000 125,000 Preferred Dividends Total Per Share Common Dividends Total Per Share 2. Determine the average annual dividend per share for each class of stock for the six- year period. 3. Assuming a market price of $100 for the preferred stock and $5 for the common stock, calculate 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.

OBJ. 3 PR 13-1B Dividends on preferred and common stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike Corp. has declared the following annual dividends over a six-year period ended December 31 of each year: 2009, $24,000; 2010, $10,000; 2011, $126,000; 2012, $100,000; 2013, $125,000; and 2014, $125,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of com- mon stock, $4 par. Instructions 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 on January 1, 2009. Summarize the data in tabular form, using the following column headings: Year 2009 2010 2011 2012 2013 2014 Total Dividends $ 24,000 10,000 126,000 100,000 125,000 125,000 Preferred Dividends Total Per Share Common Dividends Total Per Share 2. Determine the average annual dividend per share for each class of stock for the six- year period. 3. Assuming a market price of $100 for the preferred stock and $5 for the common stock, calculate 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.

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter11: Stockholders' Equity
Section: Chapter Questions
Problem 11.9E
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OBJ. 3 PR 13-1B Dividends on preferred and common stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike Corp. has declared the following annual dividends over a six-year period ended December 31 of each year: 2009, $24,000; 2010, $10,000; 2011, $126,000; 2012, $100,000; 2013, $125,000; and 2014, $125,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of com- mon stock, $4 par. Instructions 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 on January 1, 2009. Summarize the data in tabular form, using the following column headings: Year 2009 2010 2011 2012 2013 2014 Total Dividends $ 24,000 10,000 126,000 100,000 125,000 125,000 Preferred Dividends Total Per Share Common Dividends Total Per Share 2. Determine the average annual dividend per share for each class of stock for the six- year period. 3. Assuming a market price of $100 for the preferred stock and $5 for the common stock, calculate 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.
Transcribed Image Text:OBJ. 3 PR 13-1B Dividends on preferred and common stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike Corp. has declared the following annual dividends over a six-year period ended December 31 of each year: 2009, $24,000; 2010, $10,000; 2011, $126,000; 2012, $100,000; 2013, $125,000; and 2014, $125,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of com- mon stock, $4 par. Instructions 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 on January 1, 2009. Summarize the data in tabular form, using the following column headings: Year 2009 2010 2011 2012 2013 2014 Total Dividends $ 24,000 10,000 126,000 100,000 125,000 125,000 Preferred Dividends Total Per Share Common Dividends Total Per Share 2. Determine the average annual dividend per share for each class of stock for the six- year period. 3. Assuming a market price of $100 for the preferred stock and $5 for the common stock, calculate 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.
Year 2009 2010 2011 2012 2013 2014 Total ARE NOTEAMENDMEDICHER Total Dividends $ 24,000 10,000 126,000 100,000 125,000 125,000 Average annual dividend Divided by market price per share Average return on investment (percent) SUMMARY OF DIVIDENDS For the Years 2009-2014 Preferred Dividends Total ÷ Per Share Common Dividends Total Per Share
Transcribed Image Text:Year 2009 2010 2011 2012 2013 2014 Total ARE NOTEAMENDMEDICHER Total Dividends $ 24,000 10,000 126,000 100,000 125,000 125,000 Average annual dividend Divided by market price per share Average return on investment (percent) SUMMARY OF DIVIDENDS For the Years 2009-2014 Preferred Dividends Total ÷ Per Share Common Dividends Total Per Share
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