18. Silicon Industries has a cumulative preferred stock issue outstanding, which has a stated annual dividend of $8 per share. The company has been losing money and has not paid preferred dividends for the last four years. There are 260,000 shares of preferred stock outstanding and 500,000 shares of common stock.

a. How much is the company behind in preferred dividends?

b. If Silicon Industries earns $7.5 million in the coming year after taxes and before dividends, and this is all paid out to the preferred stockholders, how much will the company be in arrears (behind in payments)? Keep in mind that the coming year would represent the fifth year.

c. How much, if any, would be available in common stock dividends in the coming year if $7.5 million is earned as explained in part b?