Response to the following problem:
Boise Bike Corp. manufactures mountain bikes and distributes them through retail outlets in Montana, Idaho, Oregon, and Washington. Boise Bike Corp. has declared the following annual dividends over a six-year period ending December 31 of each year: 2007, $8,000; 2008, $24,000; 2009, $60,000; 2010, $75,000; 2011, $80,000; and 2012, $98,000.
During the entire period, the outstanding stock of the company was composed of 20,000 shares of 2% cumulative preferred stock, $75par, and 50,000 shares of common stock, $5 par.