The stockholders’ equity account of Plastic Enterprises is as follows: 

The earnings available for the common stockholders are $280,000 and are included in the $1,200,000 retained earnings.
a. Calculate the maximum dividend per share that the firm can pay if the legal capital includes all paid-in capital.
b. Calculate the maximum dividend per share that the firm can pay if the legal capital includes only the value of the common stock.
c. If Plastic Enterprises has $25,000 in cash, what is the largest per-share dividend the firm can pay without borrowing, assuming legal capital includes all paid-in capital?
d. What is the purpose of capital impairment restrictions when developing a dividend policy?

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Common stock (280,000 shares at $3.50 par) $ 980,000 900,000 Paid-in capital in excess of par Retained earnings 1,200,000 Total stockholders' equity $3,080,000