Franklin Electric Is Presently Generating Earnings Available to Common Shareholders

Multiple Choice

Franklin Electric is presently generating earnings available to common shareholders of $7.25 per share. The firm's income tax rate is 40%. Franklin is paying a dividend to the preferred shareholders of $2.10 per share. The firm's dividend payout ratio on common stock is 20%. What is the amount per share that Franklin will pay in dividends to common shareholders?

A) $0.58
B) $1.45
C) $3.12
D) $0.42
E) $2.20