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1) The XYZ Corporation has 50 shares of common stock and 50 shares of cumulative;. nonparticipating preferred stock outstanding. The stated annual dividend of the
1) The XYZ Corporation has 50 shares of common stock and 50 shares of cumulative;. nonparticipating preferred stock outstanding. The stated annual dividend of the preferred stock is $5 per share. XYZ had no profit and paid no dividend in year one. If XYZ has a profit of $1,200 in year two and the board of directors declares a total dividend of $1 200, how will the dividend be allocated between the preferred and common stockholders? Specify how much of the $1,200 will be paid to the common stockholders and how much will be paid to the preferred stockholders. Explain. (Limit your answer three sentences.)
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