Each year the preferred holders are owed: 59,000 X $10 X 0.095 = 56,050. Any shortfall is carried over and due to preferreds before the common are paid a penny.

56,050 x 2 = 112,100
112,100 - pd to preferreds ( 45,000 + 48,550) = 18,550<2 yr shortfall due preferreds after 2 years

add year 3 due preferred = ttl due preferred in yr 3 = 74,600

Yr 3: 106,050 - 74,600 paid to preferred = pd to common 31,450

52385? ;53665?

Based on the preferred stock dividend cumulating at 7.89% p.a.

Wade’s outstanding stock consists of 59,000 shares of cumulative 9.50% preferred stock with a $10 par value and also 147,500 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.





2011 $ 45,000

2012 48,550

2013 106,050

2014 156,050



Determine the amount of dividends paid each year to each of the two classes of stockholders.

Preferred Common

2011 45000 0

2012 48550 0

2013 ????? ??????

2014 56050 100000



I don't know how to get the common and preferred for 2013.