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    mlmlr's Avatar
    mlmlr Posts: 2, Reputation: 1
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    #1

    May 2, 2009, 09:00 PM
    Calculating Retained Earnings
    If I have Preferred Stock of 8%, $100 par noncumulative, 5,000 shares authorized = $400,000. How much retained earnings do I have?
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    May 3, 2009, 03:27 AM

    From the details given:-

    Retained Earnings = NIL
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #3

    May 4, 2009, 01:15 AM

    There is nothing to say you have no retained earnings. There isn't any information at all that indicates anything about retained earnings. It has nothing to do with your preferred stock.

    Retained earnings is made up of net income less dividends that have been paid out. How much dividends you pay to the preferred shareholders will affect it, but there isn't any information given to tell us what retained earnings would be.
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