Griffey Communications recently realized $87,500 in operating income. The company had interest income of $30,000 and realized $70,000 in dividend income. The companys interest expense was $50,000. 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. $16,875

b. $25,625

c. $38,125

d. $46,875

e. $34,375