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A parent holding company sells shares in its subsidiary such that the parent now owns only 65% 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% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received?

a. 10.2%; $2,245,000

b. 10.2%; $2,135,000

c. 23.8%; $1,905,000

d. 10.2%; $1,750,000

e. 34.0%; $1,650,000

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