Question
The outstanding capital stock of Riverbed Corporation consists of 2,100 shares of $100 par value, 9% preferred, and 4,500 shares of $50 par value common.
The outstanding capital stock of Riverbed Corporation consists of 2,100 shares of $100 par value, 9% preferred, and 4,500 shares of $50 par value common. Assuming that the company has retained earnings of $83,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.
(a) The preferred stock is noncumulative and nonparticipating.
Preferred - 18900 Common - 64600
(b) The preferred stock is cumulative and nonparticipating.
Preferred - 56700 Common - 26800
(c) The preferred stock is cumulative and participating.
Preferred - ? Common - ?
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