Folic Acid, Inc. has $20 million in earnings, pays $2.75 in interest to bondholders, and $1.80 million to dividends to preferred stockholders.
a. What are the common stockholders' residual claims to earnings?
b. What are the common stockholders' legal, enforceable claims to dividends?
There are ansswers for two questions: 1. computation of EAT to common stock holders and 2. Legal and enforceable rights of common stockholders