A corporation has 10,000 shares of 7%, $50 par preferred stock outstanding and 130,000 shares of no-par common stock outstanding. Dividends in arrears are $42,500. At the end of the current year, the corporation declares a dividend of $90,000. What is the dividend allocated between preferred and common shareholders?

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A: Stock: It refers to a security issued in a form of certificate. It implies the right of ownership of…

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A:

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.