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