Griffey Communications recently realized $97,500 in operating income. The company had interest income of $30,000 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.

a. $21,875

b. $39,375

c. $49,375

d. $40,625

e. $30,625