Beta Corporation has the following shareholders' equity accounts:
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Common stock at per
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$5,000,000
|
|
Paid-in capital in excess of par
|
2,000,000
|
|
Retained earnings
|
25,000,000
|
|
Total stockholder's equity
|
$32,000,000
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a. What is the maximum amount that Beta Corporation can pay in cash dividends, without impairing its legal capital, if it is headquartered in a U.S. state where capital is defined as the par value of common stock?
b. What is the maximum amount that Beta Corporation can pay in cash dividends, without impairing its legal capital, if it is headquartered in a U.S. state where capital is defined as the par value of common stock, plus paidin capital in excess of par?