Homework Answers
Solution:
Since Preferred stock is cumulative, dividend to preferred stockholders for 2 years = (80,000*$10*5%) *2 = $80,000
Total Dividend distributed = $250,000
Therefore, dividend to Common Stockholders = Total Dividend - Dividend to Preferred stockholders
= $250,000 - $80,000
= $170,000
Hence, Option "a" is correct.
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