The outstanding capital stock of Pennington Corporation consists of 2,700 shares of $109 par value, 6% preferred, and 5,500 shares of $57 par value common.
Assuming that the company has retained earnings of $89,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.
| (a) |
The preferred stock is noncumulative and nonparticipating.
(b)The preferred stock is cumulative and nonparticipating.
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