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Ace Industries has the following shareholders equity accounts at December 31, 20X1: Preferred stock, $100 par value, 10% dividend, 50,000 shares issued and outstanding $

Ace Industries has the following shareholders equity accounts at December 31, 20X1:

Preferred stock, $100 par value, 10% dividend, 50,000 shares issued and outstanding $ 5,000,000
Common stock, $6 par value, 1 million shares issued and outstanding 6,000,000
Paid-in capital in excess of par 119,000,000
Unrestricted retained earnings 7,500,000
Retained earnings restricted for plant expansion 2,500,000

Assuming that the preferred stock is cumulative, and that there are no dividends in arrears, what is the maximum dividend that may be distributed to common shareholders at December 31, 20X1?

A. $7,500,000

B. $7,000,000

C. $9,500,000

D. $2,000,000

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