Mars Corp Has 15,000 Shares of $5 Par, Cumulative, 8% Preferred

Multiple Choice

Mars Corp. has 15,000 shares of $5 par, cumulative, 8% preferred stock and 15,000 shares of common stock outstanding since being organized at the beginning of 2014. It declared its first dividend of $40,000 at the end of 2016. This means that

A) all of the $40,000 dividends available are paid to the preferred stockholders
B) all of the $40,000 dividends available are paid to the common stockholders
C) an equal dollar amount is paid to each class of shareholder
D) 3 years' worth of dividends will be paid to preferred stockholders prior to paying anything to common stockholders