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Obj. 2 Dividends on preferred and common stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail out- lets in California, Oregon, and Washington. Yosemite Bike has declared the following annua dividends over a six-year period ended December 31 of each year: Year 1, $24,000; Year 2, $10,000; Year 3, $126,000; Year 4, $100,000; Year 5, $125,000; and Year 6, $125,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of common stock, $4 par. PR 12-1B Instructions 1. 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 Year 1. Summarize the data in tabular form, using the following column headings: Preferred Dividends Total Per Share Total Common Dividends Per Share Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total Dividends 24,000 10,000 126,000 100,000 125,000 25,000 2. Determine the average annual dividend per share for each class of stock for the six-year period 3. Assuming a market price of $100 for the preferred stock and $5 for the common stock, de- termine 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

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