Dividends "start" and "end." During a fiscal year quarter, a company's board of directors declares a dividend.

2,120,000 - 400,000 to preferreds = 1,720,000 net income "available" to common equity

1,720,000 * 0.25 = $430,000

Wright, Inc. had net income for 2007 of $2,120,000 and earnings per share on common stock of $5. Included in the net income was $300,000 of bond interest expense related to its long-term debt. The income tax rate for 2007 was 30%. Dividends on preferred stock were $400,000. The payout ratio on common stock was 25%. What were the dividends on common stock in 2007?

a.430000

b.530000

c.482500

b.645000

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