Help with the Maximum Yearly Total Preferred Dividend Please!

P8-5 Dividends on preferred and common stock Yukon Bike Corp. manufactures mountain bikes and distributes them through retail outlets in Canada, Montana, Idaho, Oregon, and Washington. Yukon Bike Corp. declared the fol- lowing annual dividends over a six-year period ending December 31 of each year: Year 1, $28,000; Year 2, $44,000; Year 3, $48,000; Year 4, $60,000; Year 5, $76,000; and Year 6, $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. Instructions 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. Assume that preferred dividends are paid before any common dividends. Summarize the data in tabular form, using the following column headings: Preferred Dividends Total Per Share Common Dividends Total Per Share Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total Dividends $ 28,000 44,000 48,000 60,000 76,000 140,000 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 common stock. 7 Key Code: 2 8 Instructions 9 Answers are entered in the cells with gray backgrounds. 10 Cells with non-gray backgrounds are protected and cannot be edited. 11 A red asterisk (0) will appear in the column to the right of an incorrect answer. 12 For correct grading, enter a zero in cells you would otherwise leave blank 13 14 1. Maximum yearly total preferred dividend: Enter a formula of shares x par x percentage Preferred Dividends Common Di Total Dividends Year T otal Per Share Total Per Share $ $0.70 1.10 G AWN- 28,000 44,000 48,000 60,000 76,000 140,000 $ 28,000 44,000 48,000 52,000 52,000 52,000 1.20 1.30 1.30 1.30 $6.90 8,000 24,000 88,000 $0.00 0.00 0.00 0.16 0.48 1.76 $2.40 Average annual dividend for preferred: Average annual dividend for common: $1.15 $0.40 3. a. b. Return on initial investment, preferred: Return on initial investment, common: 2.0% 2018.0%