Internal Insights Inc

Computation of Dividend per Share on Each Class of Stock for Each of the Four Years:

For First year:

Dividend distributed in first year = $25,250

Dividend due on preferred stock (25,000 shares*$150*1%) = $37,500

Hence, entire $25,250 distributed to preferred stockholder.

Dividend per share on preferred stock = $25,250/25,000 = $1.01

Dividend on common stock = Nil

For Second Year:

Arrear of dividend on preferred share = $37,500 - $25,250 = $12,250

This years dividend due = $37,500

Total dividend due on cumulative preferred shares = $37,500+$12,250 = $49,750

Actual dividend paid during the year=$59,750

Dividend paid to preferred shareholders=$49,750

Dividend paid to common shareholders=$59,750 - $49,750 = $10,000

Dividend per share paid to preferred shareholder=$49,750/25,000 = $1.99

Dividend per share paid to common shareholder=$10,000/83,000=$0.12

For Third Year:

Dividend due for preferred shareholders=$37,500

Dividend distributed =$90,430

Dividend paid to common shareholders=(90,430 - 37,500)=$52,930

Dividend per share paid to preferred shareholder=$37,500/25,000=$1.5

Dividend per share paid to common shareholder=$52,930/83,000=$0.64

For Fourth Year:

Dividend due for preferred shareholders=$37,500

Dividend distributed =$143,740

Dividend paid to common shareholders=(143,740 - 37,500)=$106,240

Dividend per share paid to preferred shareholder=37,500/25,000 = $1.5

Dividend per share paid to common shareholder=$106,240/83,000 = $1.28