Question

A corporation has ​$1,440,000 to distribute in dividends and did not distribute dividends the previous year. there are 50,000 shares of cumulative preferred stock that earn dividends at $0.89 per share and sha 700,000res of common stock. how much money goes to common​ stockholders?

Answer 1

To calculate the amount of money that goes to common stockholders, subtract the dividends earned by preferred stockholders from the total amount of dividends. $1,395,500 goes to the common stockholders.

Step-by-step explanation:

To determine how much money goes to common stockholders, we first need to calculate the total amount of dividends being distributed. In this case, the corporation has $1,440,000 to distribute.

Next, we need to calculate the dividends earned by the preferred stockholders. There are 50,000 shares of cumulative preferred stock, and each share earns $0.89 in dividends. So, the total dividends earned by the preferred stockholders is 50,000 shares * $0.89 per share = $44,500.

Finally, we can calculate the amount of money that goes to the common stockholders. Subtracting the dividends earned by the preferred stockholders from the total amount of dividends, we have $1,440,000 - $44,500 = $1,395,500. Therefore, $1,395,500 goes to the common stockholders.