Your corporation has the following cash flows:
|
Operating income |
$250,000 |
|
Interest received |
$10,000 |
|
Interest paid |
$45,000 |
|
Dividends received |
$20,000 |
|
Dividends paid |
$50,000 |
If the applicable income tax rate is 40% (federal and state combined), and if 70% of dividends received are exempt from taxes, what is the corporation’s tax liability?
a. $83,980
b. $88,400
c. $92,820
d. $97,461
e. $102,334