The Stansbury Company Has Issued 10%, Partially Participating, Cumulative Preferred

The Stansbury Company has issued 10%, partially participating, cumulative preferred stock with a total par value of $200,000 and common stock with a total par value of $800,000. The preferred stock participates up to 15% of its par value. No dividends are in arrears. How much cash will be paid to the preferred stockholders and the common stockholders, respectively, if cash dividends of $160,000 are distributed?

A) $50,000 to preferred and $110,000 to common
B) $20,000 to preferred and $140,000 to common
C) $30,000 to preferred and $130,000 to common
D) $32,000 to preferred and $128,000 to common

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