Arm, Inc, Has 10,000 Shares of 5%, $100 Par Value, Noncumulative

Multiple Choice

Arm, Inc., has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2015. If the board of directors declares a $200,000 dividend, the

A) preferred stockholders will receive 1/10^th of what the common stockholders will receive.
B) preferred stockholders will receive the entire $200,000.
C) $50,000 will be held as restricted retained earnings and paid out at some future date.
D) preferred stockholders will receive $50,000 and the common stockholders will receive $150,000.