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Calculate how much the preferred shareholders will receive

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Question - Foster Inc. has the following shares outstanding: 50,000, $0.80, no par value preferred shares $500,000

75,000 no par value common shares $600,000

No dividends have been declared since December 31, 2018. It is now December 31, 2020, and the board of directors wants to distribute $ 240,000 in cash dividends.

Required - Calculate how much the preferred and common shareholders will receive under each of the following assumptions:

a) The preferred is cumulative and fully participating.

b) The preferred is cumulative and participating to 14% total.

Reference no: EM133081471

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