The board of directors of Picasso Manufacturing Inc may declare
The board of directors of Picasso Manufacturing, Inc., may declare a dividend this year but has not declared a dividend for the past two years. The corporation has 800,000 shares of $ 1 par value common stock authorized and 200,000 shares issued and outstanding. It also has 40,000 shares of 5 percent, $ 10 par value cumulative preferred stock authorized, of which 40,000 shares are issued and outstanding. Compute the amount of dividends available for common and preferred shareholders if the dividend declaration is $ 80,000.
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