The stockholders equity of Blue Corporation includes $300,000 of $1 par common stock and $500,000 par of 5% cumulative preferred stock. In its first year of operations, cash dividends of $20,000 were declared. In its second year of operations, cash dividends of $15,000 were declared. Now in its third year, cash dividends of $100,000 are declared.

How much of the $100,000 year three dividends will preferred stockholders receive?

Multiple Choice

• $35,000

• $25,000

• $15,000

• $40,000