Hazel,Emily,and Frank,unrelated Individuals,own All of the Stock in Wren Corporation

Hazel,Emily,and Frank,unrelated individuals,own all of the stock in Wren Corporation (E & P of $900,000) as follows: Hazel,250 shares;Emily,250 shares;and Frank,1,000 shares.Wren redeems 400 of Frank's shares (basis of $40,000) for $200,000.With respect to the distribution in redemption of the stock:

A) Frank has a capital gain of $200,000.
B) Frank has dividend income of $200,000.
C) Frank has dividend income of $160,000.
D) Frank has a capital gain of $160,000.
E) None of the above.