Yukon Bike Corp. manufactures mountain bikes and distributes them through retail outlets in Canada, Montana, Idaho, Oregon, and Washington. Yukon Bike Corp. has declared the following annual dividends over a six-year period ending December 31 of each year: 2008, $28,000; 2009, $44,000; 2010, $48,000; 2011, $60,000; 2012, $76,000; and 2013, $140,000. During the entire period, the outstanding stock of the company was composed of 40,000 shares of 2% preferred stock, $65 par, and 50,000 shares of common stock, $1 par.

1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. Summarize the data in tabular form, using the following column headings:

2. Calculate the average annual dividend per share for each class of stock for the six-year period.
3. Assuming that the preferred stock was sold at $57.50 and common stock was sold at $5.00 at the beginning of the six-year period, 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 commonstock.

  • CreatedFebruary 04, 2014
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