Preferred stock, $6\%,$$$5$ par value, $100,000$ shares authorized, $40,000$ shares issued and outstanding

Common stock, $$9$ par value, $300,000$ shares authorized, $220,000$

shares issued and outstanding

$$2,000,000$

$$1,980,000$

If the company pays a $$10,000$ dividend, and the preferred stock is cumulative, with nothing currently in arrears, what is the amount the preferred stockholders will receive?

Multiple Choice

Preferred shareholders will get $$12,000$ as that is what they are entitled to$.$

Preferred shareholders will get $$10,000,$ but the remaining $$2,000$ will be in arrears, to be paid if future dividends are large enough to do so$.$

Preferred shareholders will get $$10,000,$ but the remaining $$2,000$ will be lost.

Preferred shareholders will get $$600$ as that is $6\%$ of the total dividend payment. The remainder will go to Common shareholders.