Cork Inc.declared a $160,000 cash dividend.It currently has 6,000 shares of 6%, $100 par value cumulative preferred stock outstanding.It is one year in arrears on its preferred stock.How much cash will Cork distribute to the common stockholders?

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Cork Inc. has 6,000 shares of 6%, $100 par value cumulative preferred stock outstanding. This means that the company must pay $36,000 in dividends to the preferred stockholders before it can pay any dividends to the common stockholders. Since the company is one year in arrears on its preferred stock, it must pay $72,000 in dividends to the preferred stockholders before it can pay any dividends to the common stockholders. This leaves $88,000 available for distribution to the common stockholders.

Cork IncDeclared a $160,000 Cash Dividend