Company has common and preferred stock outstanding as follows:

Common stock 100,000 shares, $30 par

8% preferred 10,000 shares, $100 par

Dividends on preferred stock have not been paid for the last three years (in addition to the current year). If the company pays a total of $120,000 in dividends, how much will the common stockholders receive if the preferred stock is not cumulative? If it is cumulative? (answer on next slide)