A company declares a total dividend of \$30,000, but preferred shareholders are due \$40,000. What are the implications for both preferred and common shareholders?

Preferred shareholders receive \$30,000, and common shareholders receive the remaining \$10,000 shortfall.

Preferred shareholders receive their full \$40,000 entitlement, and common shareholders receive nothing.

Preferred shareholders receive the entire \$30,000, and common shareholders receive nothing.

Both preferred and common shareholders receive a proportionate share of the total \$30,000.