Sofia Ltd Reported Net Income of $ 5,300,000 for 2020, and and Earnings

Multiple Choice

Sofia Ltd. reported net income of $ 5,300,000 for 2020, and earnings per share of $ 5.00. Included in the net income was $ 750,000 of bond interest expense related to its long-term debt. The income tax rate for 2020 was 30%. Dividends paid on preferred shares were $ 1,000,000. The payout ratio on common shares was 25%. What were the dividends paid on common shares in 2020?

A) $ 1,075,000
B) $ 1,325,000
C) $ 1,206,250
D) $ 1,612,500