Norton Company issues 10,000 shares of its $5 par value common stock having a fair value of $9.90 per share and 6,000 shares of its $10 par value preferred stock having a fair value of $13.50 per share for a lump sum of $175,000. What amount of the proceeds should be allocated to the preferred stock?

a. $99,000

b. $81,000

c. $78,750

d. $96,250

e. None of the above.