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What amount of tax will pcm pay on the dividends received

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Reference no: EM132568486

During the previous year, PCM Inc., a C corporation, purchased 16 percent common stock of BDC Inc., another C corporation from its only shareholder. Both PCM and BDC operated in the same industry. During the current year, BDC Inc., distributed $1,000,000 dividends. Assume that PCM's marginal tax rate is 21%.

Question 1: What amount of tax will PCM pay on the dividends received from BDC?

Option a. $210,000

Option b. $16,800

Option c. $33,600

Option d. $160,000

Reference no: EM132568486

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