Need explanation please.

The 100 shares of outstanding, stock of Majestic Corporation,are owned by Jim and Bob, 40and 60 shares respectively. Neither shareholder is related to the other. Each has a basis in his stock of $100 per share. During the year, Jim sold 10 of his shares back to the corporation for $10,000. Assuming the corporation has substantial earnings and profits, Jim's AGI will increase by A capital gain of $10,000 A dividend of $10,000 A capital gain of $9,000 dividend of $9,000 a. o0 C lo00 e. None of the above 4000 cm een