Preferred stock—calculate dividend amounts Laura & Marty, Ltd., did not pay dividends on its 9.5%, $100 par value cumulative preferred stock during 2015 or 2016. Since 2009, 175,000 shares of this stock have been outstanding. Laura & Marty, Ltd., has been profitable in 2017 and is considering a cash dividend on its common stock that would be payable in December 2017.Required:Calculate the amount of dividends that would have to be paid on the preferred stock before a cash dividend could be paid to the common stockholders.

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.