Lipscomb, Inc., has 200,000 shares of cumulative preferred stock outstanding. The preferred stock pays dividends in the

Question:

Lipscomb, Inc., has 200,000 shares of cumulative preferred stock outstanding. The preferred stock pays dividends in the amount of $2 per share but because of cash flow problems, the company did not pay any dividends last year. The board of directors plans to pay dividends in the amount of $1.4 million this year. What amount will go to the preferred stockholders?