2) Zach Sports Ltd has 1,000 shares of $5.50, cumulative preferred shares and 10,000 common shares issued and outstanding. In the previous year (which was the first year of operations), the company paid total dividends of $1,000. The amount that must be paid to the preferred shareholders in the current year before any dividend is paid to common shareholders is: A) $12,000. B) $1,000. C) $4,500. D) $10,000. E) $3,500.