9. Adams Corporation (A). Adams Corporation (U.S.), a recently divested unit of Pfizer and the owner of a series of valuable consumer brands such as Listerine and Halls, owns 100% of Adams Brazil, S.A. This year Adams Brazil, S.A. earned R$52,000,000, equal to $20,000,000 at the current exchange rate of R$2.60/$. The exchange rate is not expected to change. Adams Corporation wants to transfer half of Brazilian earnings to the United States and wonders if this sum should be remitted 1) by a cash dividend of $10,000,000, or 2) by a cash dividend of $5,000,000 and a royalty of $5,000,000. Brazilian income taxes are 15% and U.S. income taxes are 30%. Which do you recommend and why?