At the end of the year, the Long Life Bulb Company announced that it had produced a gross profit of $1,000,000. The company has also established that over the course of this year it has incurred $345,000 in operating expenses and $125,000 in interest expenses. The company is subject to a 30% tax rate and has declared $57,000 total preferred stock dividends.
a. How much is the earnings available for common stockholders?
b. Compute the increased retained earnings for 2003 if the company were to declare a $4.25 common stock dividend. The company has 15,000 shares of common stock outstanding.