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Your corporation has the following stockholders equity. Common Stock at par $750,000 Paid in capital in excess of par 1,250,000, Retained earnings 2,500,000, Total $ 4,500,000 ....
a. What is the maximum amount of dividends the corporation can pay in states where the firm's legal capital is defined as the par value of its common stock?
b. How does your answer change if the firm is in a state where legal capital includes all paid-in capital?
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