American Wolverine, Inc, of the United States owns \(100 \%\) of WolverineIsrach. This year Wolverine-Israel carned 120 million Isracli shekels (Shk) before income taxes, equal to \(\$ 30,000,000\) at the current exchange rate of Shk \(4.00 / \$\). The exchange rate is not expected to change.

America Wolverine wants to transfer half Wolverine-Israel's post-tax earnings to the Unired States and wonders whether this sum should be remitted (1) by a cash dividend of the desired amount. The same total amount could also be remitted (2) as a cash dividend equal to half the desired remitance plus a royalty equal to the remainder. Israeli income taxes are \(40 \%\) and U.S. income taxes are \(30 \%\). What do you recommend? Why?