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Calculating the amount paid to common shareholders

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Intrepid Inc. declared a $1,000,000 cash dividend. It currently has 15,000 shares of 6%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Intrepid distribute to the common stockholders?

a. $910,000
b. $1,000,000
c. $180,000
d. $820,000

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Solution describes the steps to calculate the amount paid to common shareholders in the given case.

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Dividend for one preferred share for one year=100*6%=$6
Since nature of preferred share is ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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