Griffey Communications recently realized $75,000 in operating income. The company had interest income of $25,000 and realized $70,000 in dividend income. The companys interest expense was $40,000. 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.

Which of the following most closely matches the tax liability of Griffey Communications?

a. $15,000

b. $33,750

c. $32,500

d. $42,500

e. $23,750