Effective Tax Rate on Intercompany DividendsA parent holding company sells shares in its subsidiary such
that the parent now owns only 65 percent of the subsidiary and thus, the tax
returns of the parent and its subsidiary can’t be consolidated. The parent
receives annual dividends from the subsidiary of $2,500,000. If the parent’s marginal
tax rate is 34 percent and if the exclusion on intercompany dividends is 70
percent, what is the effective tax rate on the intercompany dividends and what
are the net dividends received?