Peabody Inc. has 5000 shares of 7% $100 par value cumulative preferred stock and 50000 shares of $1 par value common stock outstanding at December 31 2017. If the board of directors declares a $30000 dividend the

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Since the preferred stock is cumulative, any missed dividends will accumulate and must be paid before any dividends can be paid to common stockholders. Therefore, in this scenario, the entire $30,000 dividend will be paid to the preferred shareholders.