Sizemore, Inc

Multiple Choice

Sizemore, Inc.has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2020.If the board of directors declares a $25,000 dividend, the

A) preferred stockholders will receive 1/10th of what the common stockholders will receive.
B) preferred stockholders will receive the entire $25,000.
C) $25,000 will be held as restricted retained earnings and paid out at some future date.
D) preferred stockholders will receive $12,500 and the common stockholders will receive $12,500.