U.S. Corporation owns 45% of the stock of Foreign Corporation. Foreign Corporation is incorporated in...
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U.S. Corporation owns 45% of the stock of Foreign Corporation. Foreign Corporation is incorporated in Country T. In its first year of operations, Foreign Corporation earns 60,000 frugs of E&P, pays a 40,000-frug dividend, and pays 5,000 frugs in income taxes. The exchange rate between the dollar and the frug is: first year average, 1 frug = $0.20; yearend, 1 frug = $0.25; tax payment date, 1 frug = $0.30; and dividend payment date, 1 frug = $0.28. What is the translated dividend amount?
$4,500
$5,400
$5,040
$3,600
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