Alloy

Corporation has

25,000

shares of

$1.40

preferred stock outstanding in addition to its common stock. The

$1.40

designation means that the preferred stockholders receive an annual cash dividend of

$1.40

per share. In

2021,

Alloy

declares an annual dividend of

$500,000.

The allocation to preferred and common stockholders is:

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Data table

Preferred dividend (25,000 shares 1.40 per share)$35,000Common dividend (remainder: $500,000 - $35,000)465,000Total dividend$500,000

Question content area bottom

Part 1

1. How much in dividends must

Alloy

declare each year before the common stockholders receive any cash dividends for the year?

Dividends the company must declare each year before the common stockholders receivable any cash dividends =