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9 February, 05:53

Winston Corporation has 9,000 shares of 4 %, $10 par cumulative preferred stock and 47,000 shares of common stock outstanding. Winston declared no dividends in 2017 and had no dividends in arrears prior to 2017. In 2018 , WinstonWinston declares a total dividend of $54,000. How much of the dividends go to the common stockholders?

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  1. 9 February, 07:13
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    Total dividend for common stockholders = $46,800

    Explanation:

    Given:

    Number of Cumulative share = 9,000

    Price of each share = $10

    Dividend rate = 4% = 4/100 = 0.04

    Cumulative number of year = 2

    Total Declared dividend = $54,000

    Computation of Total dividend for common stockholders:

    Total dividend each year = Number of Cumulative share * Price of each share * Dividend rate * Cumulative number of year

    Total dividend each year = 9,000 * $10 * 0.04 * 2

    Total dividend each year = 7,200

    Total dividend for common stockholders = Total Declared dividend - Total dividend each year

    Total dividend for common stockholders = $54,000 - $7,200

    Total dividend for common stockholders = $46,800
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