Betta Corp.has 65,000 shares of $3 par common stock and 25,000 shares of $17 par fully participating 7% cumulative preferred stock.The company declares cash dividends of $50,000 during the current year and there are $7,000 dividends in arrears.What will be the total dividend payment to common stockholders?

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The preferred stockholders must first receive their cumulative dividends, including any arrears. The preferred dividend is 7% of $17 par value, which is $1.19 per share. For 25,000 shares, this is $29,750 annually. Adding the $7,000 in arrears, the total preferred dividend is $36,750. The remaining $13,250 ($50,000 - $36,750) is paid to common stockholders.