Porto Corporation received $88,000 of dividend income from Seville, Incorporated. Porto owns 5 percent of the outstanding stock of Seville. Portos marginal tax rate is 21 percent.

Required:

1. Calculate Portos allowable dividends-received deduction and its after-tax cash flow as a result of the dividend from Seville.
2. How would your answers to requirement a change if Porto owned 55 percent of the stock of Seville?
3. How would your answers to requirement a change if Porto owned 85 percent of the stock of Seville?

Complete this question by entering your answers in the tabs below. Calculate Porto's allowable dividends-received deduction and its after-tax cash flow as a result of the dividend from Seville