Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

Janet Wu is treasurer of Wilson Paper Company, a manufacturer of paper products for the office and school markets. Wilson Paper is selling one of its divisions for $70 million cash. Wu is considering whether to recommend a special dividend of $70 million or a repurchase of 2 million shares of Wilson common stock in the open market. She is reviewing some possible effects of the buyback with the company's financial analyst. Wilson has a long-term record of gradually increasing earnings and dividends. Wilson's board has also approved capital spending of $15 million to be entirely funded out of this year's earnings.
| Book value of equity | $750mllion($30a share) |
| Shares outstanding | 25mllon |
| 12-month trading range | $25-$35 |
| Current share price | $35 |
| After-tax cost of borrowing | 7 percent |
| Estimated full yea reaming s | $25milion |
| Last year's dividends | $9millon |
| Target debt/equity(market value) | 35/65 |


 
Assume that Wilson Paper funds its capital spending out of its estimated full year earnings. If Wilson uses a residual dividend policy, determine Wilson's implied dividend payout ratio.
Option A:36 percent.
Option B:40 percent.
Option C:60 percent.

Answer: B