=+16. A corporation with preferred stock and common stock outstanding has a substantial balance in its retained earnings account at the beginning of the current fiscal year. Although net income for the cur¬

rent year is sufficient to pay the preferred dividend of $40,000 each quarter and a common dividend of

$100,000 each quarter, the board of directors declares dividends only on the preferred stock. Suggest pos¬

sible reasons that the board passes the dividends on the common stock.