Question: Sarasota Corporation has outstanding 9,800 shares of $100 par value, 6% preferred stock and 58,500 shares of $10 par value common stock. The preferred stock was issued in January 2017, and no dividends were declared in 2017 or 2018. In 2019, Sarasota declares a cash dividend of $297,000.

(a) Assume that the preferred are noncumulative. How much dividend will the preferred stockholders receive? How much dividend will the common stockholders receive?

(b) Assume that the preferred are cumulative. How much dividend will the preferred stockholders receive? How much dividend will the common stockholders receive?

For a) preferred stockholders would recieved 58,800, and common stockholder would recieve 238,200.