Wrenn Corp

Multiple Choice

Wrenn Corp. has 5.6 million shares outstanding, interest expenses of $4.4 million, and depreciation expenses of $3.7 million. What is Wrenn's operating income if the dividend per share is $0.80 and the dividend payout ratio is 35%? Assume a marginal tax rate of 40%.

A) $15.89 million
B) $25.73 million
C) $21.33 million
D) $29.43 million