Question: Daisan Company is in the process of deciding where to establish a European manufacturing operation: France, Spain, or Sweden. Daisan's home country does not have a tax treaty with any of these countries. Regardless of location, the operation is expected to generate pretax income of 1 million euros annually. The operation will distribute 100 percent of its after-tax income to Daisan Company as a dividend each year.

Required: a. Using the information on effective tax rates and withholding tax rates provided determine the net amount of dividend that Daisan would receive annually from an investment in each of these three countries.

b. With maximizing after-tax dividends as the sole criterion, in which of the three countries should Daisan locate its European operation?