Bonner and Bard is a C corporation. For the year, the company reported taxable income of $400,000. At the end of the year, the company distributed all its after-tax earnings to Kelly, the company's sole shareholder. Kellys marginal ordinary tax rate is 37 percent and her marginal tax rate on dividends is 23.8 percent, including the net investment income tax. What is the overall tax rate on Bonner and Bards income?

A.

37%

B.

23.8%

C.

21%

D.

39.8%

E.

44.8%