Answer:
LIGHTFOOT Inc
Computation of dividend per each class of stock
Year 1
Total dividend available $4,600
Cumulative prefered dividend
(3%* 20,000*$20) 12,000
unpaid preferred dividend carried forward 7,400
Dividend per share :
Cumulative preferred stock = $12,000/20,000 = $0.6
Common stock = $0.
Year 2
Total dividend available $7,600
Cumulative prefered stock dividend :
Previous year brought forward $7,400
current year 12,000 19,400
Unpaid preferred dividend carried forward 11,800
Dividend per share :
Cumulative preferred stock = $12,000/20,000 = $0.6
Common stock = $0.
Year 3
Total dividend available $ 45,300
Cumulative Preferred stock dividend :
Dividend brought forward 11,800
current year 12,000 (23,800)
Dividend available for Common stock 21,500
Dividend per share :
Cumulative preferred stock = $12,000/20,000 = 0.6
Common stock = $21,500/25,000 = $0.86
Year 4
Total dividend available $85,000
cumulative Preferred bdividend (12,000)
Dividend available for Common stock 73,000
Cumulative preferred stock = $12,000/20,000 = $0.60
Common stock = $73,000/25,000 = $2.96
Explanation: