JDX Corporation's charter authorized 10 million shares of common stock. It has issued 5 million shares and has 1 million shares in its treasury. JDX decides to use all of the treasury stock to pay a dividend to shareholders. As a result, the number of outstanding shares is

A. 4 million

B. 10 million

C. 6 Million

D. 5 Million

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I chose C but the reasoning said it was incorrect.

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Reasoning: " Treasury stock is stock that has been issued and reacquired by the company. At that point, it is no longer outstanding in the hands of the public. Sending those shares out as a dividend puts them back in the hands of the investing public. Now, all of the five million issued shares are outstanding."

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Notice the last sentense? "Now all of the five million issued shares are outstanding." I think this is a typo, shoudn't this be 6 and the answer also be 6?