Purchase Solution

# Aaron Burr Corporation: common stockholders and dividends

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Aaron Burr Corp. had \$100,000 of 10%, \$20 par value preferred stock and 12,000 shares of \$25 par value common stock outstanding throughout 2007.

(a) Assuming that total dividends declared in 2007 were \$88,000, and that the preferred stock is not cumulative but is fully participating, common stockholders should receive 2007 dividends of what amount?

(b) Assuming that total dividends declared in 2007 were \$88,000, and that the preferred stock is fully participating and cumulative with preferred dividends in arrears for 2006, preferred stockholders should receive 2007 dividends totaling what amount?

(c) Assuming that total dividends declared in 2007 were \$30,000, that cumulative nonparticipating preferred stock was issued on January 1, 2006, and that \$5,000 of preferred dividends were declared and paid in 2006, the common stockholders should receive 2007 dividends totaling what amount?

##### Solution Summary

Common stockholders and dividends for Aaron Burr Corporation are examined.

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Dear student,

Aaron Burr Corp. had \$100,000 of 10%, \$20 par value preferred stock and 12,000 shares of \$25 par value common stock outstanding throughout 2007.

(a) Assuming that total dividends declared in 2007 were \$88,000, and that the preferred stock is not cumulative but is fully participating, common stockholders should receive 2007 dividends of what amount?

Amount of preference dividends= ...

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