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Common stockholders residual claims to earnings

Question: Folic Acid, Inc. has $20 Million in earnings, pays $2750000 interest to bondholders, and $1800000 in dividends to preferred stockholders.

a. What are the common stockholders' residual claims to earnings?

b. What are the common stockholders' legal, enforceable claims to dividends?

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Finance Basics: Common stockholders residual claims to earnings

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