Issuing Preferred Stock Bell Company issued 5,000 shares of 8 percent, $15 par value, Class A preferred stock on January 1, 1996, for $15 per share and 25,000 shares of 10 percent, $20 par value, Class B preferred stock on July 15, 1996, for $20 per share.

a. What amount of dividends must Bell declare if it wishes to distribute a dividend of $100,000 to its common shareholders at December 31, 2000?

. If Bell has not paid a dividend since December 1997, and both issues of preferred stock are cumulative with respect to dividends, what amount of dividend must Bell declare at December 31, 2000, if it wishes to pay a dividend of $100,000 to its common shareholders?
. If Bell has not paid a dividend since December 1997, and both issues of preferred stock are noncumulative with respect to dividends, what amount of dividend must Bell declare at December 31, 2000, if it wishes to pay a dividend of $100,000 to the common shareholders?
. Why would the common shareholders be motivated to have preferred stock outstanding if the preferred stock routinely receives a larger dividend than the common stock?