A company has 20,000 shares of Preferred Shares outstanding paying 0.30 cents dividend per share.It also has 110,000 shares of common stock outstanding.If the company decides to pay a total of $35,000 in dividends,the preferred stock is cumulative with two years' dividends in arrears.What is the amount of dividend common stockholders will receive?

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Preferred dividends in arrears = 2 x 0.30 x 20,000 = $12,000Preferred dividends for current year = 0.30 x 20,000 = $6,000Total preferred dividends = $12,000 + $6,000 = $18,000Common dividends = $35,000 - $18,000 = $17,000

A Company Has 20,000 Shares of Preferred Shares Outstanding Paying