Red Corporation, which owns stock in Blue Corporation, had net operating income of $200,000 for the year. Blue pays Red a dividend of $40,000. Red takes a dividends received deduction of $20,000. Which of the following statements is correct?

Red owns less than 20% of Blue Corporation.

Red owns 80% of Blue Corporation.

Red owns 20% or more, but less than 80% of Blue Corporation.

Red owns 80% or more of Blue Corporation.

None of the above.