Maker-bot corporation has 10,000 shares of 10%, $90 par value, cumulative preferred stock outstanding since its inception. no dividends were declared in the first two years. if the company pays $400,000 of dividends in the third year, how much will common stockholders receive?
a. $355,000
b. $270,000
c. $0
d. $130,000
e. $140,000

D. $130,000

Explanation:

Total Dividends to Preferred Stockholders    

10.000  Shares

10%cumulative preferred stock outstanding

$90Par Value

Dividends: 10,000 * 10% * $90 =  $90.000  

Preferred dividends in arrears for two years.

$90,000*2 Years  =  $180.000  

Preferred dividends for the current year

$90,000

Total Dividends to Preferred Stockholders  

$180,000 + $90,000 =  $270,000

Total Dividends to be paid by the company  

$400,000

Preffered Stockholers :  $270,000

Common Stockholers:  $130,000

d. low interest rates

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