Fritz Corporation Has 800,000 Shares of Preferred Stock and 1,800,000

Essay

Fritz Corporation has 800,000 shares of preferred stock and 1,800,000 shares of common stock. The cumulative preferred stock has a stated dividend of $2.50 per share. Under normal conditions, Kreisler pays out 30% of earnings available to common shareholders, however, because of a severe recession, Fritz retained all earnings last year. This year, Fritz earned net income of $6.4 million.
Calculate the dividend per share to be received by the common shareholders this year.