Since its organization in January of Year 6, Neha Corp. began with the issuance of 15,000 shares of $5 par, cumulative, 8% preferred stock and 15,000 shares of common stock shares, which are still outstanding. It declared its first dividend of $40,000 at the end of Year 8. This means that
a. all of the $40,000 dividends available are paid to the preferred shareholders.
b. all of the $40,000 dividends available are paid to the common shareholders.
c. an equal dollar amount is paid to each class of shareholder.
d. three years' worth of dividends will be paid to preferred shareholders prior to paying anything to common shareholders.