Response to the following problem:
Win Inc has 10,000 shares of 7% $100 par value cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at Dec 31, 2012. If the board declares a $60,000 dividend, the
a. preferred shareholders will receive 1/10th of what the common shareholders will receive
b. preferred shareholders will receive the entire $60,000
c. $60,000 will be held as restricted retained earnings and paid out at some future date
d. preferred shareholders will receive $30,000 and the common shareholders will receive the same.