Last Year Universal Transportation Retained $225,000 of the $750,000 Net

Multiple Choice

Last year Universal Transportation retained $225,000 of the $750,000 net income it generated. This year Universal generated net income equal to $550,000. If Universal follows the constant payout ratio dividend policy, how much should it pay in total dividends this year?

A) $550,000
B) $385,000
C) $165,000
D) $715,000
E) $525,000