How much each class of shares should receive

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The outstanding share capital of Riverbed Corporation consists of 2,800 shares of preferred and 6,700 common shares for which $268,000 was received. The preferred shares carry a dividend of $6 per share and have a $100 stated value.

Problem 1: Assuming that the company has retained earnings of $90,800 that is to be entirely paid out in dividends and that preferred dividends were not paid during the 3 years preceding the current year, state how much each class of shares should receive if the preferred shares are non-cumulative and non-participating.

Problem 2: Assuming that the company has retained earnings of $90,800 that is to be entirely paid out in dividends and that preferred dividends were not paid during the 3 years preceding the current year, state how much each class of shares should receive if the preferred shares are cumulative and non-participating.

Reference no: EM132907725

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