12 points (4 points per section) 12. Pacific Jewel Airlines is a U.S-based air freight firm with a wholly owned subsidiary in Hong Kong. The subsidiary, Jewel Hong Kong, has just completed a long-term planning report for the parent company, in which it has estimated the following expected earnings and payout rates for the 2019. (millions of USS) 10,000 Jewel Hong Kong Income Items Earnings before Interest and Taxes (EBIT) Less Interest Expense Earnings before Taxes 1.000 9,000 The current Hong Kong corporate tax rate on this category of income is 16.5 percent. Hong Kong imposes no withholding taxes on dividends remitted to U.S. investors (per the Hong Kong-United States bilateral tax treaty). The U.S. corporate income tax rate is 35 percent. The parent wants to repatriate 75 percent of net income as dividends. a. Calculate the net income available for distribution by the Hong Kong subsidiary b. What is the expected amount of the dividend to be remitted to the U.S. parent next c. After estimating the theoretical U.S. tax liability on the expected dividend (what in 2019. year? is often terms gross-up in the U.S.), what is the total dividend after tax, including all Hong Kong and U.S. taxes, expected next year? d. What is the effective tax rate on this foreign-sourced income next year