Mountain View Inc. has 50000 shares of 8% $100 par value noncumulative preferred stock and 100000 shares of $1 par value common stock outstanding at December 31 2017. There were no dividends declared in 2016. The board of directors declares and pays a $500000 dividend in 2017. What is the amount of dividends received by the common stockholders in 2017?

Question

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The preferred stockholders receive 8% of $100 par value per share, which is $8 per share. With 50,000 shares, they receive $400,000. The remaining $100,000 of the $500,000 total dividend goes to the common stockholders.