From the Information Below, Compute the Payout Ratio for Kevin's

Multiple Choice

From the information below, compute the payout ratio for Kevin's Trailers. $$\begin{array} { l r } \text { Net Income } & \$ 200 \\\text { Cash Dividends (common) } & 40 \\\text { Retained Earnings } & 500 \\\text { Stock Dividends (common) } & 10\end{array}$$

A) 25%.
B) 20%.
C) 8%.
D) 2%.