Refer to the stockholders' equity of Sterling Trust in Short Exercise 13-9. Sterling has not declared preferred dividends for 5 years (including the current year). Compute the book value per share of Sterling's common stock.

Exercise 13-9

Sterling Trust has the following stockholders' equity:

Answer these questions about Sterling's dividends:

1. Is Sterling's preferred stock cumulative or noncumulative? How can you tell?

2. Sterling declares cash dividends of \(\$ 15,000\) for 2006 . How much of the dividends goes to preferred? How much goes to common?

3. Sterling passed the preferred dividend in 2007 and 2008. In 2009 the company declares cash dividends of \(\$ 15,000\). How much of the dividend goes to preferred? How much goes to common? 

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Paid-in capital: Preferred stock, 5%, $10 par, 5,000 shares authorized, 4,000 shares issued............ Common stock, $0.10 par, 1,000,000 shares authorized and issued............. Paid-in capital in excess of par-common. Total paid-in capital.......... Retained earnings........... Total stockholders' equity. $ 40,000 100,000 300,000 440,000 260,000 $700,000