Reference no: EM132647507

Determining Preferred Dividend Distributions

Olivia Inc. had 30,000 outstanding shares of common stock, $0.01 par, and 8,000 outstanding shares of 7%, cumulative preferred stock, $50 par throughout its initial four years of operations. The company declared dividends of $0, $40,000, $40,000, $40,000, in years 1, 2, 3, and 4, respectively.

Required

Question 1: Determine how the dividends were shared between the preferred and common shareholders in years 2, 3, and 4 in total and on a per share basis.