The balance sheet of OWL Corporation reported the following:

Shareholders’ Equity
Preferred shares, redeemable, nonvoting, cumulative, authorized
16,000 shares, liquidation value $350,000 ....................................................... $350,000
Common shares, authorized 200,000 shares, issued 90,000 shares ............. 340,000
Retained earnings .................................................................................................. 120,000
Total shareholders’ equity .................................................................................. $810,000

Notes to the financial statements indicate that 16,000 of the cumulative preferred shares were issued and outstanding. The shares paid a dividend of $1.40. Preferred dividends have not been paid for three years, including the current year. On the balance sheet date, the market value of OWL Corporation’s common shares was $3.00 per share.

Required

1. Are the preferred shares cumulative or noncumulative? How can you tell?

2. Which class of shareholders controls the company? Give your reason.

3. What is the total contributed capital of the company?

4. What was the total market value of the common shares?

5. Compute the book value per share of the preferred shares and the common shares.