Sarajevo Ltd. currently has outstanding 20,000 no par value common shares with a carrying value of $ 200,000, and 10,000 no par value, $ 0.60, cumulative, fully participating preferred shares with a carrying value of $ 100,000. Dividends on the preferred shares are one year in arrears. Assuming that Sarajevo wishes to distribute $ 54,000 in dividends, the common shareholders will receive

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The preferred shareholders are entitled to receive their $6,000 dividend in arrears before any dividends can be paid to the common shareholders. Therefore, the common shareholders will receive $54,000 - $6,000 = $48,000. Since there are 20,000 common shares outstanding, each common shareholder will receive $48,000 / 20,000 = $2.40 per share.