Dividends on Preferred and Common Stock

Yukon Bike Corp. manufactures mountain bikes and distributesthem through retail outlets in Canada, Montana, Idaho, Oregon, andWashington. Yukon Bike Corp. declared the following annualdividends over a six-year period ending December 31 of each year:Year 1, $30,000; Year 2, $37,500; Year 3, $60,000; Year 4,$165,000; Year 5, $210,000; and Year 6, $263,000. During the entireperiod, the outstanding stock of the company was composed of 25,000shares of 3% preferred stock, $100 par, and 100,000 shares ofcommon stock, $25 par.

Instructions:

1. Determine the total dividends and theper-share dividends declared on each class of stock for each of thesix years. If required, round your answers to the nearest cent. Ifthe amount is zero, please enter "0".

Preferred Dividends

Common Dividends

Year

Total Dividends

Total

Per Share

Total

Per Share

Year 1

$   30,000

$______

$ ___________

$_______

$__________

Year 2

37,500

$______

$____________

$_______

$__________

Year 3

60,000

$______

$____________

$_______

$___________

Year 4

165,000

$______

$____________

$_______

$___________

Year 5

210,000

$______

$____________

$_______

$___________

Year 6

263,000

$______

$____________

$_______

$___________

$____________

$___________

2. Calculate the average annual dividend pershare for each class of stock for the six-year period. If required,round your answers to the nearest cent.

Average annual dividend for preferred:	$_____________ per share
Average annual dividend for common:	$_____________ per share

3. Assuming a market price per share of $118for the preferred stock and $31 for the common stock, calculate theaverage annual percentage return on initial shareholders'investment, based on the average annual dividend per share forpreferred stock and for common stock.

Round your answers to two decimal places.

Preferred stock:	_____%
Common stock:	_____ %