Chapter 17 Problems 2

Time Watch Co. has $46 million in earnings and is considering paying $6.45 million in interest to bondholders and $4.35 million to preferred stockholders in dividends.
	a.	What are the bondholders contractual claims to payment? (You may wish to review Figure 17-3)?
	b.	What are the preferred stockholders immediate contractual claims to payment? What privilege do they have?

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