XYZ Ltd' issued capital consists of 5 000 fully paid ordinary shares, which were issued at $ 2 when the company was formed in 2010, as well as 5 000 fully paid 5% cumulative preference shares issued in 2014 at $5 each. The company has never declared dividends. In order to raise more capital, the board decides to issue a further 2000 cumulative preference shares. Advise the board on the following questions, citing relevant statutory and case law authority: