How do I calculate dividends per share?

Accounting Question about calculating dividend per share?

• I am trying to solve this accounting problem and for some reason I cannot figure it out. Here is how the problem goes: XYZ company has stock outstanding as follows: 50,000 shares of 2% preferred stock of $50 par, and 100,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year $40,000; second year $98,000; third year $120,000; fourth year $195,000. Calculate the dividends per share on each class of stock for each of the four years. Here is what the solution should be, but I can't figure out how they are coming up with preferred dividend in part B. Yr 1 yr 2 yr 3 yr4 A total dividend distributed 40,000 98,000 120,000 195,000 B preferred dividends 40,000 50,000 50,000 50,000 preferr shares outstanding /50,000 /50,000 /50,000 /50,000 preferred dividends per share $ 0.80 1.00 1.00 1.00 The part I cannot figure out is how they are getting the figures for preferred dividends the 40,000 50,000 50,000 50,000. If someone can explain this to much me I would be grateful.

• Answer:

  In year 1 they paid a preferred dividend of $0.80. So $0.80 x 50,000 is $40,000. In the following years they paid $1.00 so $1 x 50,000 is $50,000 Hope this answers your question.