What is the effective tax rate on the intercompany dividends

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A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary, so the tax returns of the parent and its subsidiary can't be consolidated. The parent receives annual dividends from the subsidiary of $3,000,000. If the parent's marginal tax rate is 35% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and what is the amount of net dividends received?  

35.0%; $3,000,000

10.5%; $1,050,000

22.8%; $2,100,000

10.5%; $2,685,000

none of the above

Reference no: EM131558455

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