PR $12-1$A Dividends on preferred and common stock

Obj. $2$

Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six$-$year period: $20Y1,$$$60,000$;$20Y2,$ $$80,000$;$20Y3,$$$160,000$;$20Y4,$$$160,000$;$20Y5,$$$170,000$; and $20Y6,$$$180,000.$ During the entire period ended December $31$ of each year, the outstanding stock of the company was composed of $400,000$ shares of cumulative, preferred $2\%$ stock, $$10$ par, and $500,000$ shares of common stock, $$15$ par.

Instructions

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 at the beginning of $20$Y$1.$ Summarize the data in tabular form, using the following column headings:

$\backslash$table$[[$Year$,\backslash$table$[[$Total$],[$Dividends$]],$Preferred Dividends,Common Dividends$],[$Total$,$Per Share,Total,Per Share$],[20Y1,$$$60,000,,,,],[20Y2,80,000,,,,],[20Y3,160,000,,,,],[20Y4,160,000,,,,],[20Y5,170,000,,,,],[20Y6,180,000,,,,]]$

Determine the average annual dividend per share for each class of stock for the six$-$year period.

Assuming a market price per share of $$25\mathrm{.}00$ for the preferred stock and $$22\mathrm{.}00$ for the common stock, determine 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.