Griffey Communications recently realized $122,500 in operating income. The company had interest income of $35,000 and realized $70,000 in dividend income. The companys interest expense was $55,000. Its corporate tax rate is 25%. Griffey is a small company, so it is not subject to the interest expense deduction limitation.

Assume a 50% dividend exclusion for taxes on dividends.

a. $43,125 b. $34,375 c. $25,625 d. $48,125