Ferman Corporation Had Net Income of $160,000 and Paid Dividends

Multiple Choice

Ferman Corporation had net income of $160,000 and paid dividends of $50,000 to common stockholders and $20,000 to preferred stockholders in 2014. Ferman Corporation's common stockholders' equity at the beginning and end of 2014 was $870,000 and $1,130,000, respectively. Ferman Corporation's payout ratio for 2014 was

A) 5.0%.
B) 43.8%.
C) 31.3%.
D) 12.5%.