Diploma Mills has $30 million in earnings, pays $4.25 million in interest to bondholders, and $2.95 million

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Diploma Mills has $30 million in earnings, pays $4.25 million in interest to bondholders, and $2.95 million in dividends to preferred shareholders.
a. What are the common shareholders' residual claims to earnings?
b. What are the common shareholders' legal, enforceable claims to the dividends?

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Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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