Question
An accountant at a small company is trying to calculate how dividends (a share of the company's profits) should be distributed to shareholders. The company
An accountant at a small company is trying to calculate how dividends (a share of the company's profits) should be distributed to shareholders. The company made enough profit to pay all the shareholders 6% of the value of their stocks- if the money were divided equally. But actually some of the shareholders own $4 million in preferred stocks, which are guaranteed to pay 7.5% of their value in dividends. This means there is only enough money left over to pay the other shareholders 5% of the common stocks' value. What is the value of the common stocks?
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